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. Last Updated: 07/27/2016

Moody’s on Bank Provisions

Russia’s banks may need to create additional provisions of $33 billion to $45 billion to compensate for a discount sale of foreclosed assets in the next year or two, Moody’s said Tuesday.

The country’s banks hold $65 billion in foreclosed assets, or 7 percent of banking system assets, and the two-thirds of those are largely illiquid real estate assets. “We estimate that Russian banks are likely to hold foreclosed assets for a year or two more before selling at discount prices. The expected recovery on those assets, in our view, would be between 30 and 50 percent,” Moody’s said in a report.