Russia’s banking sector will be stable in 2018, aided by a moderately favorable macroeconomic situation, but the gap between strong and weak players will be noticeable and this process is likely to deepen amid low inflation environment, Moody’s analyst Olga Ulyanova commented.
The loan portfolio will expand by around 7% in 2018, she said. The figure compares to an increase between 7% and 10% forecast by the CBR in mid-September.
The rating agency expects favorable situation with bank liquidity and funding, and believes that the CBR should continue with the cleanup of the banking system. Ultimately, this will boost its independence from political influence.
Ulyanova also commented that there should be more clarity when it comes to related-party lending and loan-loss provisions as the current legislation has loopholes that are being used by bank owners to circumvent rules. She was skeptical that the state can recover funds that will be spent on the rehabilitation of Otkritie Bank and BinBank (around RUB 820bn), a view also shared by deputy CBR governor Pozdyshev.