General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
July 10, 2017

IMF published its staff report and selected issues report in the context of the 2017 Article IV consultation with the Russian Federation. Directors welcomed the steps taken to increase the resilience of the financial system, including an improved bank resolution mechanism. They encouraged the authorities to revamp the statutory bail-in legislation while keeping in mind financial stability implications. While the CBR-administered open bank resolution framework has some positive features, it is not yet consistent with international standards.

The staff report highlights that the banking sector’s performance has been improving over the past year, with banks’ deposit funding experiencing healthy growth and the banking system now in a structural liquidity surplus. Banks’ profitability is increasing—although it varies greatly across banks—on the back of higher net interest margins and lower provisioning on stabilized nonperforming loans, which after rising for two years have settled at about 9.5%. The Capital Adequacy Ratio remained stable overall and increased moderately in the past few months to nearly 13%, against a regulatory minimum of 8%, with a common equity tier 1 (CET1) ratio of 9.2% in relation to a phased-in Basel III capital requirement of 4.5%. The Central Bank of Russia (CBR) closed 110 credit institutions in 2016, compared to 101 in 2015, continuing to target mostly small banks that are weak and/or involved in dubious transactions, bringing the number of total credit institutions to 616, from 923 at the end of 2013. The authorities have taken actions to support financial stability.

 

The report reveals that the CBR has initiated some elements of an Asset Quality Review, through the newly created Risk Assessment Department, for the entire banking system, and the review is expected to be completed by the end of 2018. The Central Bank also tightened macro-prudential requirements to reduce dollarization by setting higher capital risk-weights for foreign exchange lending by banks to unhedged borrowers; strengthened stress testing by adjusting for potential misclassification of loans and linked the stress-test results to supervisory action; established a tiered supervisory framework for banks; and defined a capital surcharge for ten domestic systemically important banks. The banking system’s performance is improving and the authorities should continue with implementing last year’s FSAP recommendations. Further strengthening the effectiveness of the anti-money laundering and combating the financing of terrorism framework, including through measures related to politically exposed persons and entity transparency, will support the authorities’ efforts to address financial crimes related to tax evasion and corruption.

 

Related Links

Staff Report (PDF)

Selected Issues Report (PDF)

Keywords: Europe, Russia, Banking, Basel III, Capital Adequacy, Resolution Framework, Article IV, IMF

Related Insights
News

BoE Publishes the Schedule for Statistical Reporting for 2019

BoE published the updated schedule for statistical reporting for 2019. The reporting institutions use the online statistical data application (OSCA) to submit statistical data to BoE.

January 16, 2019 WebPage Regulatory News
News

PRA Delays Final Direction on Reporting of Private Securitizations

PRA and FCA have delayed the issuance of final direction, including the final template, on reporting of private securitizations, from January 15, 2019 to the end of January 2019.

January 15, 2019 WebPage Regulatory News
News

SNB Updates Forms on Supervisory Reporting for Banks

SNB published Version 1.7 of reporting forms (AUR_U, AUR_UEA, AUR_UES, AURH_U, AUR_K, AUR_KEA, and AURH_K) and the related documentation for supervisory reporting on an individual and consolidated basis.

January 15, 2019 WebPage Regulatory News
News

BCBS Finalizes Market Risk Capital Framework and Work Program for 2019

BCBS published the final framework for market risk capital requirements and its work program for 2019. Also published was an explanatory note to provide a non-technical description of the overall market risk framework, the changes that have been incorporated into in this version of the framework and impact of the framework.

January 14, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for January 2019

EBA published answers to 13 questions under the Single Rulebook question and answer (Q&A) updates for this week.

January 11, 2019 WebPage Regulatory News
News

PRA Proposes to Amend Supervisory Statement on Credit Risk Mitigation

PRA published the consultation paper CP1/19 that is proposing changes to the supervisory statement (SS17/13) on credit risk mitigation.

January 10, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimating Credit Loss Reserves

FASB issued a question-and-answer (Q&A) document that addresses particular issues related to the weighted average remaining maturity (WARM) method for estimating the allowance for credit losses.

January 10, 2019 WebPage Regulatory News
News

FED Updates Reporting and Supplemental Instructions for Form FR Y-9C

FED published the updated reporting instructions and supplemental instructions for the FR Y-9C reporting form. The reporting frequency for FR Y-9C is quarterly, as of the last calendar day of the quarter.

January 09, 2019 WebPage Regulatory News
News

PRA Updates Policy on Liquidity Reporting Under FSA047/048 and PRA110

PRA published the policy statement PS1/19 that provides feedback to responses to the consultation paper CP22/18 titled "Liquidity reporting: FSA047 and FSA048" and the proposal in CP16/18, which intended to correct the level of consolidation of the PRA110 reporting requirements.

January 08, 2019 WebPage Regulatory News
News

FED Proposes to Amend Company-Run Stress Testing Requirements

FED proposed to modify company-run stress testing requirements to conform with the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

January 08, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2468