World Economy

Russian Banks Make Profit But Face Tough Year

Russian Banks Make Profit But Face Tough YearRussian Banks Make Profit But Face Tough Year

The current year won’t be easy for Russian banks but there are no grounds for problematic situations, Deputy Chief of Russia’s Central Bank Mikhail Sukhov told reporters on the sidelines of the Russian Economic and Financial Forum in Geneva, Switzerland.

“In general, I think it will be difficult but there are no serious grounds for problematic situations. The year won’t be easy but I think that managing banks in a difficult situation is not less important than managing them in a period when the market situation is favorable,” Tass quoted him as saying.

According to Sukhov, Russian banks will be able to rebuild capital using yuan-nominated funds.

“There’s been no effort to artificially stimulate payments in other currencies, we’ve just expanded the list of currencies for paying (contribution to capital). This is not an artificial measure, it just spares discomfort of Chinese investors who want to invest in yuan,” he said.

The official noted that the profit of Russian banks totaled 83 billion rubles ($1.2 billion) in January-February and may reach 100 billion rubles ($1.4 billion) by the end of the first quarter.

“The net profit for January-February amounted to 83 billion rubles. This profit was obtained not only by our largest bank, and the banking sector (in general) also was profitable for the first time recently.

In December and at the beginning of this year, the profitability of banks began to recover. I think that in the first quarter earnings will exceed 100 billion rubles. As for annual forecasts, we should be careful with them, but I think that the figure of 400 billion rubles is quite real,” Sukhov said.

  China Eyes Russian Banks

A number of Chinese banks are negotiating takeover deals with a number of Russian financial institutions, Sputnik quoted Sukhov as saying.

“It is true that some Chinese banks are examining the situation with a number of Russian banks,” Sukhov told reporters on the sidelines of the forum.

The forum is due to run until March 18. The fifteenth edition of the forum, which has been convening annually for the past 20 years, will focus on the outlook for Russia in light of the financial slowdown in the global economy following the world financial crisis.

The Russian economy suffered a setback in 2014, as the ruble lost about half of its value against the dollar amid low global oil prices and western economic sanctions imposed against Russia over the Ukrainian crisis.

Last month, Russian Economic Development Minister Alexei Ulyukayev said the country’s economy might see renewed growth in 2016.