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Rating agency predicts growth of Russian banks' assets in 2017

Xinhua, February 27, 2017 Adjust font size:

Russian banks' assets in 2017 will grow by 2 percent, amounting to almost 81.95 trillion rubles (1.41 trillion U.S. dollars), the Russian Analytical Credit Rating Agency (ACRA) forecast on Monday.

"The growth of the Russian banking system will continue in 2017. After the last year's record fall, this year bank assets will grow up to 2 percent. Leading dynamics will be presented by retail lending, particularly mortgages," Russian news agency RIA Novosti reported citing ACRA.

The share of Russia's problematic loans in the current year will continue to be relatively high -- to at least 14 percent. The cost of risks in 2017 will grow up from 0.3 percent to 1 percent, the rating agency said in a forecast.

The deposit base of Russian banks in 2017 will grow at a moderate pace. The volume of individuals' deposits will increase by 9 percent and legal entities will increase by 12 percent. The Bank of Russia's policy on encouraging savings and economic recovery after weak results of 2016 will stimulate the growth, predicted ACRA.

The agency also noted that the transition of the Russian economy to a smooth recovery will be accompanied by a stabilization of the financial results of banks.

Competition for liabilities in conjunction with the reduction of interest rates on loans will put pressure on the net interest margin -- indicators of Russian banks' profitability will remain at relatively low levels -- no higher than 1.5 percent, said the forecast.

The Russian economy suffered a setback in 2014 as a result of Western economic sanctions and low global oil prices. The ruble lost about half of its value against the U.S. dollar, and the country's GDP fell significantly. Endi