RUSSIAN BANKS PRIVATELY DISCUSS BAILOUT AMID SURGE IN BAD LOANS – BLOOMBERG REPORT
Top executives at several of Russia’s largest banks have reportedly held internal talks about seeking government-funded bailouts if non-performing loans (NPLs) continue to rise, according to sources cited by Bloomberg.
At least three systemically important lenders, including Sberbank and VTB, have modeled recapitalization scenarios for the next year. Internal assessments suggest loan book deterioration is significantly worse than official figures show.
▶️ Key Concerns:
• Official data reports just 4% of corporate loans and 10.5% of unsecured consumer loans as non-performing.
• Insiders argue real figures are far higher, but regulatory restructuring is masking the issue.
• Distressed mortgage loans at Sberbank rose 90% in Q1, reaching a 2-year high.
• Unsecured NPLs surged 22.5% at Sberbank; VTB’s consumer bad loans jumped from 3.9% to 4.8%.
🔍 Policy Response:
Central Bank Governor Elvira Nabiullina maintains that the system remains “well capitalized,” citing 8 trillion rubles in reserves. However, the central bank may need to release its macroprudential buffer to help banks absorb rising losses.
🧠 Outlook:
Bank executives warn of “difficult times ahead” as corporate and consumer credit quality worsens. While no formal bailout requests have been filed, insiders suggest the entire sector is watching conditions closely.