Nabiullina called fears of a banking crisis unfounded

Fears of a banking crisis in RUSSIA are unfounded, says Central Bank Chairwoman ElviraNabiullina . The banking system has a large capital reserve, and the growth of the share of problem assets is insignificant Elvira Nabiullina

Concerns about a banking crisis in Russia are unfounded, said Elvira Nabiullina, Chairperson of the Bank of Russia, at a briefing, an RBC correspondent reports.

"Having all the information on banks, naturally, as the body that supervises banks, I say with full responsibility that these concerns are absolutely unfounded. Yes, our banking system is well capitalized. Despite the fact that this capital is unevenly distributed across the banking system, the capital reserve is large - 8 trillion rubles," Nabiullina emphasized at the Financial Congress in St. Petersburg .

The agency reported fears of a banking crisis at the end of JuneBLOOMBERG . The agency's sources in the banking sector spoke about the risks of the debt crisis spreading across the financial sector next year in the context of high rates.

"We see a certain increase, but a very insignificant one, in the share of problem assets both in retail and in the corporate sector, but it is small. And by the way, in retail lending, we took macroprudential measures in advance, seeing that in 2023-2024, at first, there was a large increase in retail lending, including due to an increase in the share of risky loans," the HEAD of the Central Bank noted. All these loans are very well covered by reserves, Nabiullina emphasized.

The Central Bank also gave banks the opportunity "to restructure loans without the need to create reserves, but only for those loans where we see an absolutely objective restoration of normal loan servicing after rates begin to decline," the head of the Central Bank recalled. At the same time, applications for loan restructuring have been decreasing in the banking system as a whole in recent months, although they may have increased for some banks.

The Central Bank has maintained a tight monetary policy since 2023, and since autumn 2024 has kept the rate at a record high of 21%. Only in June did it lower the rate, and only to 20%. Against this background, large banks, in particular Sberbank and VTB, faced an increase in loan defaults in the first quarter. According to the Central Bank, the share of overdue mortgage debt over 90 days as of April 1 increased to 0.9% (0.5% a year earlier), for consumer loans - to 10.5% of the portfolio (+2.8 percentage points over the year).

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