Banks’ overdue debt might rise to 11%

The Russian banks’ total share of overdue debt might amount to 9%-11% of their lending portfolio by the middle of the year, the Bank of Russia’s Banking Regulation and Surveillance Director Alexei Simanovskiy said to RIA Novosti.

‘If the current trend carries on, the share of overdue debt will probably amount to about 7% of the lending portfolio, with figures calculated in accordance with the Russian Accounting Standards. Added to this is 1% to 2% of the so-called postponed debt that the banks are officially allowed not to declare until July 1, 2010. This is done under the Bank of Russia’s Provision 2156-Ó on the peculiarities of credit risk assessment of loans and debt. Also, one should bear in mind that there exists 1% to 2% of hidden arrears, so all this, under the trend, should bring the total share of the banks’ overdue debt to 9%-11%,’ RIA Novosti quotes Simanovskiy as saying.

The Central Bank of Russia believes the share of overdue debt on bank loans will gradually start to go down in the second half of 2009.

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