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8.1.4 NPLs
Asset quality declined in the corporate segment as the share of overdue amounts reached 7.8%, while in retail this share improved to 4.3%. The respective figures, as of YE18, were 6.3% and 5.1%.
The overall non-performing loan (NLP) has fallen to a modest 6.7%.
8.1.5 Banks specific issues
CBR introduces new initiatives for systematically important banks. The initiatives below were outlined in the CBR’s consultancy paper.
A more diversified approach to SIFI (Systematically Important Financial Institutions) buffers, accounting for the weight of the bank in the system. Thus, for 2 out of 11 systemically important banks in Russia – Sberbank and VTB – SIFI buffers may be increased to 2.5% and 1.5% from current 1%. As of 1 January, N1.1 for Sberbank and VTB are 10.7% and 7.8%, respectively vs min 8% accounting for all buffers
A new requirement on credit risk concentration N30 (instead of current N20), based on core capital ratios with 25% limit, effective 1 January 2022
An amendment to generalizing capital aspect in “The methodology to define SIFI” that would take into account a non-residence activity criteria with a 10% weight. Proposed changes to the methodology are in the table below
Certain amendments should be made to the Federal law “On the Central Bank of the Russian Federation” to impose the initiatives above, given differing regulation
Internal rating-based (IRB) approach will be made obligatory for SIFIs. Sberbank and Raiffeisenbank already use IRB, while Alfa bank is waiting for regulatory permission. This also requires some amendments to the Federal Law
62 RUSSIA Country Report February 2020 www.intellinews.com
