Moody`s changes Russian banking system outlook to `negative`
Moody's international rating agency has changed the Russian banking system outlook to 'negative' from 'stable' on global turbulence which is weakening the banking sector's performance, the agency said on Monday, RIA Novosti reported.
"The outlook change to negative for the Russian banking system reflects concerns that the weak global economic landscape and financial market volatility will weaken Russia's operating environment, negatively affecting banks through a system-wide liquidity contraction, slower credit growth and pressured asset quality," Moody’s said in a statement.
The outlook expresses Moody's expectations for the fundamental conditions in the banking sector over the next 12-18 months.
Moody's forecasts that Russia's real gross domestic product growth will slow down to 2.8 percent in 2012 compared to an estimate of 3.8 percent in 2011 due to a weak global recovery. Increasing risks to global energy demand may impact the operating environment for Russian banks over the outlook horizon as economic growth is largely driven by oil prices, the agency added.
"Global financial market volatility, reduced access to wholesale funding, continued capital flight and downward pressure on the ruble, have already lead to a liquidity squeeze in the Russian banking system," Eugene Tarzimanov,
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