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Russian banks face 500B ruble capital gap in stress-test adverse scenario

The Central Bank of the Russian Federation's latest stress tests showed that 117 local banks, holding 30.6% of the country's banking assets, would in an adverse macroeconomic scenario face a potential total capital shortfall of around 500 billion Russian rubles.

A further 51 banks, holding 19.4% of assets in Russia, would not be able to meet additional capital requirements, such as buffers set for systemically important banks, the regulator noted in its 2017 banking supervision report.

The banks' common equity Tier 1 ratio under the adverse macroeconomic scenario would fall to 5.2% from 8.2%; the Tier 1 ratio to 5.5% from 8.5%; and the total capital ratio to 8.7% from 12.1%.

The adverse macroeconomic scenario included oil being priced at $25 a barrel, a drop in GDP and a 39% depreciation of the ruble.

The number of banks that would be at risk of a capital deficit increased considerably compared with the previous year;s results because the macroeconomic assumptions applied by the regulator for the latest test are more stringent, RBK Daily reported June 6.

As of June 6, US$1 was equivalent to 61.97 Russian rubles.