Russian banks will continue to improve their funding and liquidity metrics throughout 2016 amid growing money supply and deposit inflows caused by government spending, Moody’s Assistant Vice President Svetlana Pavlova said in a press release on Monday.
“These improved funding profiles are driven by strong deposit growth — 20% in 2015 — which exceed loan growth — 8% in 2015 — and allow banks to reduce reliance on CBR [Central Bank of Russia] funding,” the release said.
Pavlova underscored that Russian banks have emerged among the strongest in major developing markets. “Russian banks have generally become more resilient to refinancing risk, with enough liquid assets to potentially repay all their market funding,” she added.
Moody’s noted, however, that the outlook for the banking system remains negative, as the rating agency expects deterioration of banks’ asset quality and pressure related to the economic downturn.
The Russian economy suffered a setback in 2014, as the ruble lost about half of its value against the dollar amid low global oil prices and Western economic sanctions imposed against Russia over the Ukrainian crisis. However, the economy is set to recover in 2017, according to the International Monetary Fund (IMF).