Credit conditions in Russia to remain tight for some time

Credit conditions in Russia have tightened substantially over the past six months or so, with households and SMEs being particularly hard hit. We don’t expect a significant turnaround anytime soon. Non-performing loans are set to rise further over the coming quarters, which we estimate could in time lead to capital losses of close to 1.5trn rubles. This means that balance sheets of Russian banks will remain under strain and credit conditions will stay tight throughout 2016 and into 2017.