Credit risks in Russia are increasing

According to the newspaper Vedomosti, Russian banks have passed the peak of lower costs for impairment of loans. By the end of 2010 contributions fell from 6,4 to 1,4%. Must now be re-grow up to 1,5%. According to the report, S & P: «The volume of lending to return to pre-crisis levels much faster than improve the quality of assets that are generally entails the creation of new reserves for losses on loans." In 2010, lending volume grew by 12,6% and in 2011, is projected S & P, will increase by 15 - 20%. The increasing cost of reserves following the increase in lending - a sign of economic recovery from the recession. Loan growth will result in an increase in redundancy in absolute value. Lyudmila Lebedev, president of First Republic Bank, said that corporate credit reservations at 1.5% - is the norm, and the retail figure is much higher, it reaches 6 - 10% in combined loan portfolio of the total cost of reservation should reach 2% . "Central Bank took a course on tightening requirements on the risks of his official opinion: no one in Russia now borrowers first or second group, many banks, regulators recommended to transfer some of the obligations of the second group in the third and, accordingly, increase the reservation for them" - says CEO National Rating Agency Viktor Chetverikov. Last year large-scale dissolution of reserves has become one of the reasons for a big profit.