World Bank is seeking for a workable mechanism for purchasing so-called ‘bad debt from Russia banks so as to help the industry meet the growing demand for credits in the country, Timothy Krause, the head of International Finance Corp. (IFC)’s department overseeing financial markets in Europe and Central Asia, said.
According to IFC, a subsidiary of WB, the volume of toxic credits in Russia is expected to reach $70bln by yearend. From this sum only 2%, or just $1bln, were until recently available for sale. According to Krause, IFC is currently in negotiations with Sberbank and Deposit Insurance Agency on possibility of acquiring their toxic credits valued at over $100mln. And, this might not be the limit, as the size of problematic corporate loans is high in the structure of total toxic credits, estimated at 1.6trln rubles, or 9.9% Russian banks’ gross corporate loans portfolio.
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