Thursday, December 3, 2020
Home Business finance World Bank: Russia Banking Sector Remains at Risk Despite Recent State Costly...

World Bank: Russia Banking Sector Remains at Risk Despite Recent State Costly Bailouts

"The banking sector remains afflicted with high concentration and state dominance," the World Bank said in the report

The World Bank says Russia’s banking sector is stabilizing but remains at risk despite recent state bailouts of Russian banks totaling tens of billions of dollars.

In a scheduled report dated June 10, the Washington-based lender estimated that state-owned banks now account for 62 percent of all assets at Russian banks following the closure of hundreds of lenders in recent years and the rescue of several major financial institutions.

“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. The warning comes less than a week after the World Bank, the lending arm of the International Monetary Fund, cut Russia’s 2019 economic growth forecast to 1.2 percent from a previous estimate of 1.5 percent because of oil production cuts.

world bank, russia banking sector
“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. Pixabay

While the bank said Russia’s macroeconomic and fiscal buffers were strong, economic growth prospects remained modest. “Downside risks to Russia’s growth outlook stem from the potential expansion of sanctions, deterioration of financial market sentiment, souring global trade environment and a dramatic drop in oil prices,” the report said.

Russia’s business climate faces stiff headwinds for many reasons, including the economic sanctions imposed by the United States, Japan, and European allies for Moscow’s 2014 seizure of Crimea, along with alleged Russian interference in U.S. elections.

Also Read- The Pros and Cons of Banks that Don’t Use Chexsystems

The World Bank projected annual economic growth for the years 2020 and 2021 at 1.8 percent. “On the upside, national projects aimed at strengthening human capital and increasing productivity, if well-implemented, could positively affect Russia’s potential growth in the medium-term,” the bank said in its report.

Russia’s economy expanded 2.3 percent in 2018, aided in large part by one-off projects, buoyant energy prices, and an influx of tourists for the soccer World Cup. (RFERL)

STAY CONNECTED

19,120FansLike
362FollowersFollow
1,778FollowersFollow

Most Popular

World Needs To Decrease Fossil Fuels Production By 6%

Even though countries plan to increase their fossil fuel production over the next decade, research shows that the world needs to decrease the production...

The Oscar Awards Gala Will Not Go Virtual, In-Person Telecast Will Happen

There were a lot of speculations around how the Oscars would be held amid the Covid pandemic, and it is now confirmed the award...

India Is A Key Market For The Japanese Entertainment Industry

Indian interest towards Japanese culture has been growing significantly over the last few years, especially amongst Gen Z, believes Kaoru Miyamoto, Director General, Japan...

Tips To Follow While Protecting Your Kids From Potential Health Effects

Children are more sensitive to the effects of smog and air pollution than adults. Here are some practical tips for you to follow to...

AWS Is A Game Changer For Artists On Netflix

As video streaming turns out to be the savior for millions of people working from homes to refresh their minds, Amazon Web Services (AWS)...

Twitch And Beauty: Could The Streaming Site Rival Instagram’s Hold On The Influencer Market

By Harry Green The key to influencing is access to the audience. Instagram is flexible, in this regard: posts, stories, and live streams are integral...

Is The Previous Generation iPhone Best For You

By Zedd Salem Apple’s iPhones are undoubtedly some of the best smartphones out there. From responsive performance to compelling hardware designs, you can never go...

3 Real Estate Investment Types You Can’t Overlook in 2021

By Sana Faisal Real estate is an incredibly profitable investment. Understanding the difference between residential, commercial, and raw land real estate is essential to selecting...

Recent Comments