Russia: Renewed hope for the SMEs
Euromoney Limited, Registered in England & Wales, Company number 15236090
4 Bouverie Street, London, EC4Y 8AX
Copyright © Euromoney Limited 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Russia: Renewed hope for the SMEs

Small and medium-sized enterprises (SMEs) in Russia have faced a tough time over the past two years after large corporates and private individuals tightened their belts and once-enthusiastic banks cut back their lending activity as the country went into recession. Consequently, the SME banking segment registered the highest bad loan ratios, which only served to shrink the availability of funding even further.

But with the Russian economy reviving, banks with a strategic focus on the SME sector are looking forward to reaping the rewards of the improved business climate. Locko-Bank, for example, has seen a strong uptick in its financial fortunes in the past year, registering across-the-board growth on the asset, lending, customer base and equity fronts.

As a result it has regained capital markets access, launching a Rb2.5 billion ($82 million) 2015 domestic bond in late July – it’s first for two years. Olga Gorokhovskaya, director, debt capital markets, at investment bank Troika Dialog, which joint lead managed the transaction, says that the successful placement of the deal, which had tightened in from a launch yield of 9.25% to 8.59% by mid-August, proves that SME-focused banks are coming back in favour.

Gift this article