{"id":238367,"date":"2025-11-01T19:59:22","date_gmt":"2025-11-01T19:59:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/238367\/"},"modified":"2025-11-01T19:59:22","modified_gmt":"2025-11-01T19:59:22","slug":"russias-central-bank-tightens-rules-on-lending-to-heavily-indebted-firms-amid-rising-corporate-risks","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/238367\/","title":{"rendered":"Russia\u2019s Central Bank Tightens Rules on Lending to Heavily Indebted Firms Amid Rising Corporate Risks"},"content":{"rendered":"

Russia\u2019s Central Bank will double<\/a>\u00a0capital requirements for banks lending to highly indebted companies from December, citing rising financial risks in the corporate sector.<\/p>\n

In a statement published Friday, the regulator said that existing measures introduced in April had proved insufficient.<\/p>\n

Over the first nine months of 2025, corporate groups with high debt burdens increased borrowing by 10.2%, compared with 6.5% across the entire corporate sector.<\/p>\n

The surcharge on such loans, known as a macroprudential add-on, will rise from 20% to 40%, meaning banks will need to hold more capital against these exposures.<\/p>\n

“The increased buffer will motivate banks to more carefully assess the risks of companies with increased debt burdens,” the Bank said.<\/p>\n

The rule applies to companies whose interest coverage ratio (ICR) under IFRS was below three as of July 1.<\/p>\n

According to<\/a> the Central Bank, 13 of Russia\u2019s 78 largest companies had an ICR below one last year, indicating they were not earning enough to cover interest payments.<\/p>\n

Russian Railways and AvtoVAZ, as well as coal and construction firms, are among those struggling with debt servicing.<\/p>\n

The regulator estimates<\/a>\u00a0that 2.1 trillion rubles ($23 billion) of loans fall under the surcharge, and banks have built a 17-billion-ruble capital buffer since April \u2014 a level it deems inadequate.<\/p>\n

The Central Bank said the higher add-on will apply only to new lending and will not significantly disrupt credit activity, while encouraging banks to assess borrower risks more carefully.<\/p>\n

Economist Dmitry Polevoy said<\/a> the measure could curb lending appetite and weigh on economic activity, while analysts at the government-linked CMASF think tank warned<\/a> that nearly a third of corporate revenue could come from financially vulnerable firms next year.<\/p>\n

\u201cBanks always bear the brunt of any problems that arise in the economy at the next stage,\u201d Sberbank CEO German Gref said<\/a> earlier this year, noting that more companies are struggling to service their debt.<\/p>\n","protected":false},"excerpt":{"rendered":"Russia\u2019s Central Bank will double\u00a0capital requirements for banks lending to highly indebted companies from December, citing rising financial…\n","protected":false},"author":2,"featured_media":238368,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,6267,1294,56,54,55],"class_list":{"0":"post-238367","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-central-bank","10":"tag-economy","11":"tag-uk","12":"tag-united-kingdom","13":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/238367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=238367"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/238367\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/238368"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=238367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=238367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=238367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}