The Russian banking sector has felt no substantial impact from bailout of two major private banks and has enough foreign currency at hand to pay back foreign debt, the central bank said on Tuesday. The banking sector in Russia was shaken in late August when the central bank said it would rescue Otkritie, then Russia's largest private lender by assets. The rescue of another major lender, B&N Bank, followed less than a month later.
"Problems of these credit institutions had no substantial impact on the banking sector as a whole," the central bank said in a quarterly report on financial stability. The central bank said Otkritie and B&N had run risky business models over the past three years while also taking part in the financial rehabilitation of other lenders. The central bank said the banking sector now has enough liquidity in foreign currency to live through the next debt repayment peak in December, when banks and companies will have to redeem $15.7 billion worth of outstanding debt.
Foreign debt repayment has been in focus since 2014 when Russian banks lost the ability to borrow abroad cheaply because of Western sanctions designed to punish Moscow for its role in the Ukrainian crisis and annexation of Crimea. "Risks related to a possible deficit of foreign currency liquidity remain at low levels," the central bank said. Outlining risks to financial stability, the central bank said cryptocurrencies, such as bitcoin, could pose such threats. Bitcoin, the most well-known virtual currency, which emerged in mid-2010, is increasingly popular worldwide as it promises substantial profits. One bitcoin rallied towards $10,000 this week, up from its initial price of less than $1.
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