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Banks: deterioration of assets quality and earnings reduction

Author

Listed:
  • Michael Khromov

    (Gaidar Institute for Economic Policy)

Abstract

In 2015, deterioration of bank assets quality and reduction of profitability obtained from net operating income have led to a drastic fall of bank earnings. This deprived the banking sector of the main source of capital base replenishment while capital adequacy level was close to a critical point. Up to the end of summer 2015, bank capital growth was mainly true of major banks. As a result, while the banking sector was increasing capital base the significant number of banks still operated with insufficient bank stock to sustain further deterioration of assets quality without the additional support.

Suggested Citation

  • Michael Khromov, 2015. "Banks: deterioration of assets quality and earnings reduction," Russian Economic Development, Gaidar Institute for Economic Policy, issue 11, pages 32-34, November.
    • Handle: RePEc:gai:recdev:624
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    More about this item

    Keywords

    Banking sector; Russian Economy;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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