Russian banks and their customers are well-positioned to deal with the dual impact of coronavirus and a sharp fall in the price of oil, according to the chief executive of Alfa-Bank.
Speaking before Moscow went into indefinite lockdown on Monday, Vladimir Verkhoshinskiy said the Russian banking sector is much better prepared for a downturn today than it was before both the 2014 to 2015 Ukraine crisis and the global financial crisis.
He also dismissed suggestions that a surge in retail lending over the past three years could exacerbate the impact of Covid-19 on the industry.
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Vladimir Verkhoshinskiy, Alfa-Bank |
“In 2014 leverage was higher in all segments – retail, SMEs and corporates,” said Verkhoshinskiy. “Since then Russian banks have become much more professional in their lending behaviour. We are also still well below western and central Europe in terms of retail lending to GDP.”
Similarly, the fall in the value of the rouble following Russia’s decision to abandon its agreement with Opec on oil production in early March will have less impact on banks than after the oil price collapse in 2014, according to Verkhoshinskiy.
