Today, the international rating agency Fitch Ratings has published a needs assessment to recapitalize the banks, due to continuing problems with the quality of assets in the sector.

Under the baseline scenario is estimated agency sector would be further capital infusion of $ 674 billion. (22 billion dollars), while in the pessimistic scenario may require additional capital contribution of $ 1 880 billion. (60 billion dollars).

rating actions on the concrete banks will continue to be caused mainly by the degree of problems with the quality of the assets of each credit institution, the ability to absorb losses and the adequacy and reliability of plans to recapitalize in a more pessimistic scenario outlined in the report circulated by the agency.

While the problems with the quality of assets and capital requirements of the Russian banking sector are likely to be substantial, the risks smoothed current government support to the banking sector and the broader economy, as well as stronger oil prices, -- notes Alexander Danilov, Senior Director in Fitch Group analysis of financial institutions.

At the same time remains a significant negative risk, as reflected in our pessimistic scenario, due to a lack of transparency regarding the extent of current problems with the quality of assets, a sharp decline in economic activity in the 1 half of 2009, as well as the high dependence of economic indicators , public finance, asset prices and exchange rates in Russia from oil prices, - adds Danilov.

Fitch

Baseline scenario assumes an increase of loans in depreciated to 25%, with permanent loss of credit equal to half that figure, or 12.5%. In a pessimistic scenario, Fitch considers the possibility of increasing the share of loans depreciated to 40%, while losses on loans - up to 24%.

Based on management accounts reytinguemyh banks cheap loans accounted for approximately 10% of the portfolio in sector 1 Mar, 2009, however, Fitch notes that these figures are still treated to a rather early stage of the current economic downturn and that the management accounts may not always reflect all problems with the quality of assets. A cheap credit means the loans overdue for more than 90 days, as well as loans, maturities for which was extended due to the inability of borrowers to perform obligations under the original payment schedule.

As the four large state-controlled bank, which occupy about 43% of sector received an estimated 760 billion rubles. (24 billion dollars) of new capital since the end of quarter 3. 2008, in the future recapitalization needs are likely to be concentrated in the private financial institutions - said James Watson, Managing Director of the analytical group Fitch for financial institutions.

In this context, Fitch views as a potential positive reports that the Russian government may adopt a program of recapitalization of large and medium-sized banks (with assets of more than 50 billion rubles.) through the exchange of government debt to preferred shares of banks .

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