Needed capital

As of subordinated loans from the Central Bank and VEB capital of Sberbank and VTB is 745 billion rubles. and 445 billion rubles. respectively. Capital adequacy at both banks - more than 22%, although the Central Bank requires a minimum of 10%. However, as early as next year, rising delinquency on loans could endanger the capital adequacy of state banks, analysts said Alex Kantarovich and Anna Avdokushina. Now the share of loans, payments for which arrested more than 90 days, Sberbank and VTB, according to JPMorgan, did not exceed 2-3%. The first line of defense against the growing bank of delay - the profit. When you create a reserve of 75% of bad debts Sberbank will lose profit if the share of problem loans had reached 10.7% and VTB will not be able to earn at 10,1%, analysts estimate. If profit is not, and the proportion of problem loans continue to grow, would threaten banks' capital. Operating income before provisions of the Savings Bank will be in 2009, $ 8.9 billion, says JPMorgan. The sufficiency of its capital will be reduced to a minimum level of 10% if the bank's own funds decreased by $ 15.7 billion This corresponds to 16% strength in the share of nonperforming loans of 100% reserve, while 75% rated - 21% strength. Sufficiency VTB Capital falls to a minimum, if its capital reduced by $ 10.8 billion for this is enough to share of nonperforming loans increased to 19% at 100% of Mr. reservation or to 25,5% or 75% nom. However, the baseline scenario JPMorgan fraction of the delay in Russia in 2009, the average may reach 10-15%. In this case, Sberbank and VTB will be able to do without capital increase. However, analysts are reminded that in world history, crises share of bad loans in banks' assets reached 20-30% and in Kazakhstan over the past 12 months it has risen from 6% to 16%. According to the estimates of analysts at Troika Dialog, the banks will lose profits if the share of problem loans will exceed 8% when you create 100% of international reserves. In 1997, the proportion of bad loans in Japan and South Korea reached 35% in Russia in 1998 - 40% in Turkey in 2000 - 28%, similar to analysts at Renaissance Capital. In 2009 in Russia, they expect growth delay on loans (calculated according to Russian Accounting Standards) from 2% to 3-5%. The representative of VTB declined to discuss the forecast of next year. The representative of the Savings Bank said that the scenario of zero profit for 2009 is highly unlikely.