Defaults companies because of rising interest rates could begin as early as January
The first quarter for many domestic enterprises can result in defaults. At risk – importers, construction and trading companies. Following them, the situation is complicated and for banks, which will have to create additional reserves. The winners may be ruble Gazeta.ru, writes.
The massive defaults Russian companies may begin immediately after the holidays. Banks raise rates on ruble loans to corporate borrowers to 35-40% due to the increase of the key rate of the Central Bank to 17%, a level that head MAYOR Alexei Ulyukayev called extreme, and some of the businessmen – death.
If the regulator does not reduce the base rate in January, in the first quarter, interest on loans will grow at a faster rate as the number of bankruptcies.
This will lead to massive defaults in the first quarter of 2015, warned several high-ranking sources in banking and business.
Improving the key rate of the Central Bank to 17% in mid-December in awe of many corporate borrowers. “Banks in droves to raise rates on already issued loans. In some cases, they grew to three-fold from 12 to 36%. This is the beginning of the lead to the bankruptcy of enterprises. At the moment, I have received information about two bankruptcies due to rising interest rates, both of which occurred in the food industry “- says business ombudsman Boris Titov.
According to the director of the rating agency” Expert RA “Paul Samieva if the rate will not be reduced for many industries it will be very heavy, and it threatens to default, because the company will not be able to fulfill their obligations.
«There are industries in which deterioration began as early as this year – the construction , the tourist industry, air freight. NPLs this year unexpectedly began to grow in the trading companies – usually, most of them are short-term loans, they need to refinance / roll over the debt, so that the trading business will fall under the first rate hike. In any case, all suffer – the rate of 17% does not meet the profitability of the business “- indicates Samiev.
Banks raise interest rates before the New Year
While the rates for corporate borrowers start at 17-18%. “But the first quarter of the rates for corporate borrowers will definitely be revised, – says deputy chairman of the bank” Revival “Lyudmila Goncharova. – The question is, what will inflation: the company to survive the key interest rate at 17%, inflation is expected to be even higher ».
If the Central Bank does not act, according to partner FBK Alexey Terekhov, banks have reserves at the end of the first quarter to grow by 10-15%.
It may even, to some extent benefit the ruble.
Since the provision for possible losses that banks hold at the Central Bank, formed in rubles, it is quite possible that the abrupt withdrawal of ruble liquidity from the market will lead to a dramatic reduction in her, and this, in turn, will lower the value of the dollar against the ruble, say experts of the banking market.
However, the economy as a whole, it will not save. If the rate is not reduced, especially the real sector, and other industries will face hard times – a series of bankruptcies, seizures banks liens, bankruptcies already credit institutions themselves. Need to prepare measures to prevent this scenario, including rehabilitation mechanisms of unstable banks under state guarantees, says Titov. At the Central Bank, there are two options: either in the short term to reduce the rate or issue preferred agents money at interest rates below the key. “The government is afraid of the same and hyperinflation, and defaults and subsequent surge in unemployment,” – said co-chair of the board of directors of the investment company “Third Rome” Andrei Movchan, adding that such a situation may lead to the nationalization of companies with high debt load.
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