Page 76 - RusRPTDec20

8.1.4​ NPLs
The sector ratio of doubtful and loss loans (the two lowest categories under the Central Bank of Russia, CBR, classification, a good proxy for non-performing loans) was stable in 1H20​, while we estimate banks restructured about 11% of loans in the period from 20 March to 9 September 2020. Most restructuring was carried out under the banks' own programmes, while loans renegotiated under the state's 'credit holidays' scheme are estimated to be less than 5% of total sector restructuring (about 0.5% of total system loans).
SME and retail restructuring spiked in April and May and volumes of new rescheduling declined in June-August. Corporate restructuring lags SME and retail as corporate loans typically amortise more slowly and larger companies have cash cushions they can use for servicing loan payments. Corporate restructuring also tends to be a complex and long process compared with more standardised decisions for retail and SME customers.
The Fitch-calculated sector average cost of risk was 3.3% in 1H20, up from 2.4% in 2019, driven by weaker macro forecasts and the revaluation of provisions against loans denominated in foreign currencies due to ruble depreciation. Non-performing loans (NPLs) were comfortably provisioned, while the CBR allowed banks to delay recognition of reserves against pandemic-driven restructuring to end-1Q21 for corporate loans, and to end-1H21 for SME and retail loans.
76 ​RUSSIA Country Report​ December 2020 www.intellinews.com