Russian banks continue to suffer losses in Ukraine
At the end of the third quarter, subsidiaries of Russian banks in Ukraine again showed results worse than the local market, Kommersant reports.
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“So, according to the results of the third quarter, the corporate loan portfolio of Ukrainian VTB decreased by 8,6%, Prominvestbank - by 7,8%, Alfa Bank - 5,8%, Sberbank - by 2,7% for the quarter. In retail lending, all players except Alfa Bank also recorded a reduction in their portfolio; Alfa Bank’s portfolio grew by 7%.
Almost all banks with Russian controlling shareholders in the Ukrainian market suffered losses: Prominvestbank (-$41 million), VTB (-$26 million), Alfa-Bank (-$69 million). And only Sberbank recorded a small profit ($3 million). In fact, without the results of the subsidiaries of Russian banks, the Ukrainian sector would have been profitable, but according to the results of the third quarter it received a loss of $102 million,” the publication notes.
At the same time, Kommersant points out that Ukrainian subsidiaries of Russian banks demonstrate similar dynamics, despite different strategies.
“So, VEB intends to sell Prominvestbank, VTB is inclined to gradually wind down its business in Ukraine, Sberbank is optimizing its business, reducing its physical presence in favor of a remote one, Alfa Group is growing its business,” write the authors of the publication.
“On the horizon for at least the next two to three years, high loan defaults make it almost impossible to make a profit while running a traditional banking business in Ukraine,” the publication cites the opinion of the director for bank ratings of “Expert RA” Yuri Belikov, according to whom, in order to preserve the banking business Owners foreign to Ukraine must be prepared for years of unprofitable operations and constant capital injections.
“In Ukraine, the idea of expelling the ‘aggressor country’s banks’ periodically arises,” added Kommersant’s interlocutor on the Ukrainian banking market. “And although it has not yet been implemented, there are such risks that do not allow the subsidiaries of Russian banks to do business on an equal basis with local ones.”
The newspaper recalls that a new round of squeezing Russian banks out of Ukraine began in October, when a number of deputies introduced a corresponding bill.
“Banks with Russian capital, especially the subsidiaries of state banks, are simply under attack and are forced to change their strategies for behavior in the market. Yesterday they had one strategy, and now the risk of losing their business has again arisen. Official strategies remain, but in practice they change, now banks are again looking for buyers for assets,” said another source familiar with the situation, adding that as a result of constantly changing realities, “Russian subsidiaries are bringing more and more losses to their shareholders.”
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