The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Alfa sheds light on Russia’s troubles

Along with its peers Russia’s Alfa Bank has been battered and bruised by the financial and economic crisis. Its president, Petr Aven, tells Sudip Roy how the bank is battening down the hatches.

LAST MONTH ALFA Bank, one of Russia’s biggest banks and part of oligarch Mikhail Fridman’s empire, saw its long-term credit rating downgraded to B+ from BB– by Standard & Poor’s.

It was not the only Russian bank whose ratings were revised but since it is one of the country’s leading financial institutions the move was a timely reminder of the frailties of Russia’s banking industry, which has been especially vulnerable to the financial and economic crisis.

Russia’s banks first came under siege in August 2007 after the international capital markets, on which they were dependent for funding, seized up. Although support from the central bank has eased fears about liquidity provisions, attention has now turned to the increase in non-performing loans in the banking sector. The central bank reckons that bad loans could hit 12% by the end of the year, compared with about 3% at the beginning of 2008, wiping out all bank profits in 2009. Fitch reckons that the ratio could reach 40% of all credit portfolios if things turn out particularly badly. The ratings agency reckons that the banks might need $80 billion in extra capital.

Although Alfa Bank is better placed than most Russian banks to withstand further shocks it is far from immune to them.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree