The Russian banking sector has survived. In the first quarter of 2009, analysts were ready to predict a far-reaching crisis and, even as late as mid-year, there were still fears that the government would need to recapitalise many privately owned banks. But with oil bouncing back towards $70 per barrel, that threat appears to have receded.
Of course, with gross domestic product forecast to contract by 8.5% in 2009, unemployment is up and company revenues are down. This has a lagged effect on non-performing loans (NPLs) for both retail and corporate customers. However, the doomsday forecasts of 20% to 40% NPLs across the sector that were gaining credence in early 2009 have not played out. Data from leading international credit bureau Experian shows personal loan arrears in Russia reaching 12.5% in October 2009. But this is a historically high-risk, high-yield business - the arrears rate was at 10% even in June 2007. Real estate loan arrears are far lower, at less than 6%.
