The bank business in Russia yields no profits now. Each third bank lost in October, while the aggregate losses neared 40 billion ruble.
Photo: Maria Plotnikova/Kommersant
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All Profits Lost
The banking business in Russia yields no profits now. Each third bank lost in October, while the aggregate losses neared 40 billion ruble. Russia’s banking system had posted no negative result since 1999.
The Central Bank of Russia released yesterday the data from October accounting reports of the banks. It emerged that the aggregate loss of the banking system reached 39.3 billion ruble in October. Of all reported banks (970), 683 banks posted profits of 29.7 billion ruble, while the remaining third (288) suffered from the loss of 69.0 billion ruble on aggregate. The VEB's report hadn’t been taken into account, as that bank is the state monopoly acting under the federal law and having no bank license. The October loss of VEB equaled 46.0 billion ruble, exceeding the losses of all banking system.
Svyaz Bank led amid the losers (26.4 billion ruble), suffering mostly from the stocks’ revaluation (-4.7 billion ruble) and the growth in delayed arrears of 2.5 billion ruble to 9.3 billion ruble. The growth in delayed debt of Svyaz Bank created the need to establish new reserves of 5 billion ruble. The new holder of that bank, VEB, set to its recovery in October.
As to the state bank losers, in addition to VEB, VTB generated the loss of 7 billion ruble in October and Gazprombank posted the loss of 3.4 billion ruble.
On aggregate, Russia’s banks used to profit over the recent decade. According to the CBR, the monthly aggregate profits averaged roughly 44 billion ruble from January to August, but the amount slid to 1.3 billion ruble in September.
The analysts blame the poor October performance on the slump on Russia’s stock market, which resulted in the revaluation of stocks of the banks’ portfolios. The MICEX index lost 24 percent in September and sank 29 percent in October.
www.kommersant.com
All the Article in Russian as of Nov. 27, 2008
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