...Weak Rouble Adds to Pressure on Russian Banks' Credit Profiles The renewed fall in the oil price and the corresponding devaluation of the rouble will put pressure on Russian banks' credit profiles. This is due to heightened asset-quality risks, as about 26% of sector loans are in foreign currency, of which probably around a half were issued to unhedged borrowers, high hedging costs incurred by banks with short balance-sheet positions, and capital pressure from inflation of foreign-currency risk-weighted assets - although this is temporarily offset by regulatory forbearance. The direct impact from devaluation is limited because most banks (and the sector as a whole) are long in FX. Fitch's sector outlook for Russian banks is negative and most banks, with the notable exception of the national leader, Sberbank, were loss-making in 1H15. Retail lending contracted by 5%, while corporate credit was stagnant. Doubtful and loss loans (a good proxy for NPLs) accounted for 8.2% of loans (91% reserved)...
