LONDON, July 16 (Reuters) - Private Russian banks facing a $2.15 billion loan maturity wall over the next four months will be forced to swallow steep price hikes, or explore local funding options, as the debt crisis fuels international lenders’ concerns over creditworthiness.
The country’s largest private bank Alfa-Bank, as well as Promsvyazbank and MDM Bank are among a handful of banks that have been left disappointed after several relationship lenders quoted all-in pricing of 350 basis points (bps)-400 bps for one-year loans.
Lenders’ expectations mark a 60 percent price hike on some of the borrowers’ 2011 deals.
“Perhaps Russian FIs [financial institutions] would be prepared to pay 320 bps-340 bps all-in, but certainly not 400 bps, or over,” a banker said. “They want to come to the market before the end of 2012, but the pricing is too high for the time being.”
Comparatively, pricing is significantly lower for the country’s top banks. For example, Russia’s third-biggest lender Gazprombank is expected to pay 275 bps all-in, with a 150 bps margin, on its $600 million club loan - Russia’s largest FI deal since November 2011.
Without price hikes, the hopes of private banks fully rolling over their refinancings is very low, bankers said.
“Some of their credit perspectives are relatively weak and lenders are not hugely confident with the FI sector outside of the top Russian banks,” a second banker said.
Sberbank is the largest bank in Russia and Eastern Europe with a 30 percent share of the country’s banking capital.
However, a third banker pointed out that some banks may not need cash until 2013 as business is slow.
The total of $2.15 billion of loans due to mature by the end of 2012 include AK Bars Bank, Alfa-Bank, B&N Bank, Bank Uralsib, Bank Zenit, Credit Bank of Moscow, Credit Europe Bank Russia, Home Credit and Finance Bank, Nomos Bank, Promsvyazbank and TransCreditBank, according to Thomson Reuters LPC data.
The pricing challenges in particular are expected to push some of the banks towards the highly liquid local rouble loan and bond market over the coming months, at a time when first-half volumes in the deal-hungry international loan market struggle to recover from a three-year low.
Loan volume for all Russian borrowers plummeted to $9.75 billion in the first half of 2012 from $20.6 billion year-on-year - marking the lowest first- half total since 2009.
Loan activity for Russian banks has been particularly stagnant, with the only two signed deals this year totalling $130 million-equivalent.
Hopes that some of the top banks, such as Sberbank and VTB , will tap the loan market later this year may be curtailed by the banks’ colossal rouble liquidity. (Reporting by Michelle Meineke; Editing by Christopher Mangham)