MOSCOW, March 3 (Reuters) - Over two thirds of Russian loans are guaranteed by real estate, new research by Russia's top lender has shown, an imbalance analysts have warned is a huge risk for the banking sector if the economic situation worsens.
Unlike Russian stocks, which rallied last year after a deep fall in 2008, real estate prices have lost 30-50 percent since peaking in 2007 and have yet to recover.
'The structure of collaterals with the top 20 Russian banks shows that the share of real estate property ... exceeds 70 percent,' Svetlana Sagaydak, a director for managing problem assets at Sberbank, told a conference on Wednesday.
The data, compiled by Sberbank, came as a surprise for analysts, who previously had no reliable research on the issue.
'I have tried to estimate the share, but it is too complicated,' Olga Veselova, an analyst at Troika Dialog said.
Analysts see huge potential risk to the banking sector from an uncertain real estate market.
'It all depends on how the real estate market feels. If it continues to recover, the problem should not be that acute,' said VTB Capital analyst Svetlana Aslanova.
Russian banks including top lenders Sberbank and VTB are heavily exposed to the construction sector and have already seized a huge number of assets, including development companies, residential real estate and shares in development projects.
'The construction sector recovery is very poor ... And this is a headache for the whole banking sector,' Sagaydak said.
Banks suffered hefty losses last year due to increased bad loans charges and were unable to sell the related collateral for enough to cover their losses.
'Some banks have already loaded up to one third of their balance sheets with non-core assets in a hope to sell them when the prices go up,' Alexey Chalenko, an advisor to Uralsib bank's CEO told the conference, adding that the move may not pay off.
(Reporting by Oksana Kobzeva and Dmitry Sergeyev, Editing by John Bowker and Will Waterman) Keywords: RUSSIA BANKS/CONSTRUCTION (dmitry.sergeev@reuters.com; +7 495 775 1242; Reuters Messaging: dmitry.sergeev.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Unlike Russian stocks, which rallied last year after a deep fall in 2008, real estate prices have lost 30-50 percent since peaking in 2007 and have yet to recover.
'The structure of collaterals with the top 20 Russian banks shows that the share of real estate property ... exceeds 70 percent,' Svetlana Sagaydak, a director for managing problem assets at Sberbank, told a conference on Wednesday.
The data, compiled by Sberbank, came as a surprise for analysts, who previously had no reliable research on the issue.
'I have tried to estimate the share, but it is too complicated,' Olga Veselova, an analyst at Troika Dialog said.
Analysts see huge potential risk to the banking sector from an uncertain real estate market.
'It all depends on how the real estate market feels. If it continues to recover, the problem should not be that acute,' said VTB Capital analyst Svetlana Aslanova.
Russian banks including top lenders Sberbank and VTB are heavily exposed to the construction sector and have already seized a huge number of assets, including development companies, residential real estate and shares in development projects.
'The construction sector recovery is very poor ... And this is a headache for the whole banking sector,' Sagaydak said.
Banks suffered hefty losses last year due to increased bad loans charges and were unable to sell the related collateral for enough to cover their losses.
'Some banks have already loaded up to one third of their balance sheets with non-core assets in a hope to sell them when the prices go up,' Alexey Chalenko, an advisor to Uralsib bank's CEO told the conference, adding that the move may not pay off.
(Reporting by Oksana Kobzeva and Dmitry Sergeyev, Editing by John Bowker and Will Waterman) Keywords: RUSSIA BANKS/CONSTRUCTION (dmitry.sergeev@reuters.com; +7 495 775 1242; Reuters Messaging: dmitry.sergeev.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.