OREANDA-NEWS. December 03, 2009. Deputy CBR Chairman Aleksey Ulyukayev revealed improved CBR expectations regarding prospects for the banking sector. He now believes NPLs will be at the 7% level at YE09, and peak at 10% in 2010. He also anticipates bank lending to demonstrate 15% growth next year, and indicated the possibility of further rate cuts, reported the press-centre of OTKRITIE FC.

View: We believe that CBR verbal interventions are important factors for improving investor attitudes and providing a general impression of stabilization. However, we still believe that growth in bank lending will only resume in tandem with an economic recovery, rather than drive the economy out of recession. While banks still see a high risk of NPL growth, the possibility for a sizable growth in lending portfolios could be only related to specific state-sponsored programs, such as state guarantees.