Latest news with #baddebts
Reuters
4 days ago
- Business
- Reuters
Russian central bank sees no risk of looming banking crisis
ST PETERSBURG, Russia, July 3 (Reuters) - The Russian central bank sees no risk of a looming crisis in the country's banking system as rising bad debts are well covered by banks' $100 billion in capital, Governor Elvira Nabiullina said on Thursday. The share of bad and restructured loans in Russian banks' portfolios has been rising, as more companies struggle to refinance their debts at interest rates that have jumped above 30% as a result of the central bank's tight monetary policy. Some economists and bankers have recently raised concerns about the health of the banking system in light of the growing share of bad debts. The last time the central bank had to bail out a major Russian bank was in 2017. "Having full information about the banks, as the authority overseeing them, I can state with complete confidence that these concerns are absolutely unfounded," Nabiullina told reporters. "The banking system is well capitalized, despite the fact that this capital is unevenly distributed across the banking sector. The capital buffer is substantial at 8 trillion roubles ($101.18 billion)," Nabiullina said. Russia's second-largest bank, VTB, reported that the share of non-performing loans (NPLs) in its portfolio that have not been serviced for over 90 days reached 5% in May. During the financial turbulence of 2014-16, VTB's share of such loans was as high as 10%. VTB's First Deputy CEO, Dmitry Pyanov, said the share of NPLs could rise to between 6% and 7% within the next few months, but stressed that this was still far from peak levels. VTB estimated the share of restructured corporate loans at 3%. Nabiullina said the continued strong profits reported by the banking sector this year indicate that banks have not been forced to increase provisions to cover the rising share of bad loans. "Banks are not significantly increasing provisions. If the share of bad loans were rising, the share of provisions would also increase, which would lead to a decrease in profits. But banks' profits are comparable to last year's," she said. The central bank introduced an additional requirement on provisions, called a "countercyclical buffer", at 0.25% of total assets in February and raised it to 0.5% from July 1. It is considering a further increase to 1%. ($1 = 79.0705 roubles)
RNZ News
15-05-2025
- Business
- RNZ News
Manawa Energy's profit tumbles after 'extremely challenging' year
Manawa Energy's profit tumbles. Photo: 123RF Manawa Energy's bottom-line profit has crashed after a challenging year shaped by weak generation, high wholesale electricity prices and after an independent power retailer defaulted on payments. Key numbers for the 12 months ended March compared with a year ago: The electricity generator, which has just received regulatory approval to be taken over by Contact Energy , saw its total generation volumes fall 15 percent due to low hydro inflows and wind generation. Manawa said it also faced "extremely challenging market conditions". "Extreme fuel shortages across the winter period of 2024 drove wholesale electricity spot prices to record levels," the company told the NZX. "Manawa was, at times, exposed to these spot prices given the relatively fixed nature of its contractual sales volumes." The shortages were driven by low national hydro inflows, below-average wind generation, and gas shortages. But it "quickly reversed" as conditions returned to normal and as gas availability "dramatically increased". "The sudden and rapid increase in available fuel saw spot electricity prices fall dramatically across most of the period from September 2024 through to the end of the calendar year," Manawa said. The company also wrote off $6.8 million in bad debts after independent retailer Prime Energy defaulted on payments. "The unprecedented conditions of winter 2024 resulted in a further adverse impact on the business with an independent electricity retailer, for whom Manawa acted as a wholesale intermediary, defaulting on its payment obligations," it said. Manawa said it recovered a significant portion of the original debt. The company did not provide a full-year outlook and did not declare a final dividend amid the imminent takeover by Contact Energy. Manawa expected the deal, which would be carried out by way of a scheme of arrangement, to be implemented in July.
RNZ News
07-05-2025
- Business
- RNZ News
ANZ bank posts 23% first-half profit lift
The profit lift was driven by gains from financial hedges, lower costs, and reduced bad debts. Photo: RNZ / Marika Khabazi The country's biggest bank has posted a 23 percent lift in first half profit driven by gains from financial hedges, lower costs, and reduced bad debts. ANZ's profit for the six months ended March was $1.28 billion on the back of instruments to protect against foreign exchange and interest rate volatility. Leaving aside those gains the cash profit was up 3 percent to about $1.2b with a slight increase in lending, higher deposits, and a small gain from money set aside for bad debts that did not eventuate. Chief executive Antonia Watson said the bank's performance reflects the broader economy with customers cautious about spending, but is benefiting from lower mortgage rates and paying off debt quicker. More to come...
