Increase in debt restructuring and postponed repayment of corporate loans in Russia

The stock of bank lending to non-financial corporations increased rapidly in late March and early April. In May, however, there was no growth in the loan stock compared to the previous month. Preliminary figures show that growth recovered slightly in June (up 0.5 %). The share of non-performing loans (NPLs) was relatively stable throughout the early part of the year, accounting for 6.8 % of the corporate loan stock at the end of May. However, the number of debtors applying for various restructuring arrangements has increased rapidly. During this spring the Russian authorities introduced various anti-crisis measures to help debtors hit by the corona recession. The measures include e.g. direct interest subsidies, provision of cheap financing to banks for lending programmes and temporary easing of bank capital requirements.

Information collected by the CBR (CBR bulletin) indicates that more than 2.3 trillion rubles, or over 7 % of the corporate loan stock has been restructured since March. Many of the support measures announced by the Russian government this spring have focused on small and medium-sized enterprises (SMEs) in distressed sectors of the economy. About a third of all firms in these sectors are covered by loan restructurings. As of end-June, over 90,000 SMEs were able to restructure their borrowings of around 670 billion rubles, corresponding to over 13 % of the total lending to the SME sector. About half of the restructured SME loans were granted to firms operating in commerce, 17 % to firms in the transportation sector and 10 % to firms in the restaurant and tourism branches. CBR governor Elvira Nabiullina noted that the total amount of restructured loans is about 4.3 trillion rubles (close to 7 % of the credit stock).

In addition, government-sponsored loan repayment holidays affected about 55,000 borrowers in the SME sector (total 120 billion rubles) as of end-June. According to information released by the economy ministry last Friday (July 10), banks have granted about 500 billion rubles in loans with government-subsidised interest in order to help businesses survive the corona recession.