08 June 2004 23:52
S&P comments on Russian interbank market
LONDON. June 8 (Interfax) - The closure of Sodbusinessbank (not rated) in May 2004 and the uncertain status of
CreditTrust Bank (not rated) are causing turbulence in Russia's interbank market, Standard & Poor's
Ratings Services said Monday.
Sodbusinessbank and CreditTrust Bank together had roughly 17 billion rubles (roughly $600 million) in assets as of
January 1, 2004, according to Russian Accounting Standards. "This accounts for only 0.3% of the Russian banking
system's total assets, so contagion, rather than any immediate direct impact of the closure of these banks on the
real economy, is the main source of risk associated with the turbulence," said Standard & Poor's credit
analyst John Gibling.
The Russian banking sector is characterized by an absence of clear
and useful disclosures of beneficial ownerships, widespread
"We will continue to closely monitor funding conditions for the
Russian banks that we rate and will examine in more detail the broad
These developments come at a time when the Central Bank of Russia is intent on strengthening and improving its
supervisory oversight of Russian banks. This is critical if the credit quality of the Russian banking system, which is
very low by international standards, is to see sustainable improvement.
related-party lending, funding dependencies, and credit concentrations, all of which make improving supervision
difficult and which pose a risk to all banks in the system. The interbank market is shallow and illiquid in Russia, and
has long been viewed by Standard & Poor's as a sectoral weakness.
spectrum of risks and challenging conditions under which Russian banks operate in an overview of the Russian banking
system to be published later this month on RatingsDirect, Standard & Poor's Web-based credit analysis
system," added Gibling. [RU ASIA EUROPE EEU EMRG BNK AAA] me
[Interfax] |
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