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Bad debt to keep increasing until mid-2014

October 31, 2013, 17:32 UTC+3
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MOSCOW, October 31 (Itar-Tass) - Bank of Russia (CBR) predicts the growth of overdue loans will continue till mid-2014, the head of the CBR banking regulation department, Vasily Posdyshev, told Journalists on Thursday.

“I think bad debt will be increasing till the end of 2014, at least till its second half-year. Then we shall see a better quality of the loan portfolio, with more serious and tough procedures applied in relation to the overdue debt,” he said adding banks would be able to straighten out from mid-2014.

According to the CBR, overdue retail loans increased 35 percent to 422.5 billion roubles in January-September 2013. In September alone they added 3.3 percent, says the banking sector review. Bad debt has been increasing ahead of banks’ loan portfolios. Thus, retail loans grew 21.5 percent to 9.4 trillion roubles over nine months.

In the corporate sector, overdue loans totalled 956.2 billion roubles as of October 1, 2013, 3.5 percent up over nine months and 0.4 percent up in September. Overall corporate lending increased 10.1 percent to 22 trillion roubles in this period.

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