Another Russian bank collapses

The Russian central bank has nationalised two of the country’s biggest banks. Is a systemic crisis now in the offing?

Andrew Van Sickle
By
published
in Features

There are worrying signs in Russia's banking sector, says Ivana Kottasova on CNN Money. The Russian central bank has nationalised B&N Bank, the country's eighth-largest by assets. Only a few weeks ago it had to bail out the biggest private lender, Otkritie. Is a systemic crisis now in the offing?

The trouble in the sector stems from the oil-price collapse and recession of 2014, a downturn exacerbated by EU and US sanctions against Russian companies. The International Monetary Fund thinks up to 13.5% of all loans could be bad. The official figure is 10%.

The banking downturn is worst among the private banks, add Jake Rudnitsky and Anna Baraulina on Bloomberg. The central bank gave them carte blanche and cheap loans to take over struggling rivals when the recession hit, allowing non-state operators to build up strength while their government-backed counterparts dealt with sanctions. The Bank of Russia insists that a domino effect won't occur but given the financial authorities' forecasting record during the global crisis, means investors should keep a very close eye on Russia's banks.

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Andrew Van Sickle
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

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