Goodbye stability

On April 4, it became clear that Russian banks were entering a crisis. In just one day, the capitalization of Oleg Tinkov's TCS Bank fell by 17.5%, or $254 million.

The Russian economy is cooling down very quickly, like a man who suddenly finds himself in the cold without a hat, coat or mittens. There are two reasons. The first is the stagnation of the economy, which began last year. The second is the complete uncertainty with the prospects for foreign financing, in which the largest Russian companies and banks have found themselves because of the annexation of Crimea.

So far, there are three visible channels for the spread of the crisis. The first is the gradual deterioration of the financial situation of companies and citizens burdened with bank loans. Banks are preparing for losses. The second channel is the cooling of consumer markets. The third is problems with on-lending to businesses that can no longer rely on foreign loans.

Banks are always among the first to feel the deterioration of the situation. Last week, Sberbank President German Gref warned that the bank was moving towards a crisis scenario and helping borrowers: “We are seeing a significant deterioration in the positions of our clients, a very large number of debt restructurings.” Worst of all now, according to Gref, metallurgists, builders and agriculture. UC Rusal, Mechel and Evraz have a high debt load - three of them $26.4 billion.

Last week, Mostovik, one of the main kings of state orders, announced its bankruptcy. She received a claim from Sberbank for the recovery of 18.9 billion rubles of debt, and before that she could not pay Gazprombank and Alfa-Bank. "Mostovik" became a victim of unprofitable projects in preparation for the Sochi Olympics. She built an ice stadium and a bobsleigh track in Sochi, and before that, a bridge to Russky Island before the APEC summit in Vladivostok (2012): Olimpstroy refused to pay for one of the contracts. Another major Olympic contractor, Inzhtransstroy, which built 14 facilities for the 2014 Olympics, announced its liquidation altogether. The CEO of the largest coal company SUEK, Vladimir Rashevsky, said at a government meeting that the industry is experiencing the deepest recession in a decade, investments are declining, companies are generating losses. Coal miners are asking to subsidize interest on loans. It is likely that support will be needed both for the borrowed metallurgists and for Vnesheconombank, which recognized as "bad" 190 billion out of 249 billion rubles of loans for Sochi construction.

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Banks are always among the first to feel the deterioration of the situation

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The position of borrowers-citizens is also deteriorating. This can be seen in Oleg Tinkov's TCS Bank, which issues consumer loans at high rates. Due to the economic slowdown, the bank's expected loan losses will rise to 17% (or even higher) in 2014.

Consumer markets are also slowing down. Ford Sollers announced the transfer of two of its Russian plants to a one-shift operation (there were two). The Vsevolozhsky plant is planned to be stopped for 1.5 months, and a third of the employees to be fired. AvtoVAZ, whose Lada sales fell by 15% last year, is also cutting staff.

As usual, the crisis hits the relatively poor earlier than the rich. Patrizio Bertelli, head of the Italian fashion house Prada, said that since the beginning of the Crimean crisis, the company's sales in Russia increased by 30%. Whether customers relieve stress, or get rid of cheaper rubles ...

The situation is similar in the real estate market. Ruble prices for Moscow housing continue to grow slightly, but in such a way that sellers still lose in currency terms. The number of transactions is also growing - people are trying to invest the depreciating rubles in real estate.

The economic crisis has not yet begun. Now we can observe its harbingers, thunder before the approaching thunderstorm. If the Kremlin continues to pursue policies that lead the country to economic and financial isolation, the crisis will be serious enough.