Bloomberg News

Russia Risks Liquidity Squeeze on Sberbank, Raiffeisenbank Says

February 21, 2012

Feb. 21 (Bloomberg) -- OAO Sberbank is facing a shortage of long-term liquidity that may trigger “shocks” on Russia’s money market similar to the squeeze seen late last year, according to ZAO Raiffeisenbank.

Russia’s biggest lender is the main borrower of Bank Rossii repurchase facilities, accounting for as much as 80 percent of banks’ repo liabilities as of Feb. 1, the Moscow-based lender said in a research note e-mailed today. The deficit resulted from faster lending growth last year and limited potential for expanding Sberbank’s funding base, according to the report.

“A big market participant facing liquidity shortage may cause shocks on the money market at the time of shrinking overall volume of liquidity in the system, similar to those seen in the final quarter of last year,” Raiffeisenbank analysts wrote.

Sberbank will primarily rely on attracting savings deposits and tapping the Russian bond market to satisfy its need for long-term funding, according to the report.

To contact the editor responsible for this story: Paul Abelsky at pabelsky@bloomberg.net


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