Fitch: Russian banks face liquidity risks

Fitch Ratings said that, in general, Russian banks remain susceptible to liquidity and confidence issues, despite some positive trends in the system, with some segments of the sector better placed than others to absorb a stress scenario.

The tighter global conditions would likely affect Russian banks to varying degrees, in the agency's view.

"In recent years, to fund very rapid balance sheet growth a large number of Russian financial institutions have increased reliance on the international capital markets to diversify funding and to better match asset and liability maturities," Inessa Tolokonnikova, associate director in Fitch's financial institutions group, said in an agency release.

"While in most cases the near-term refinancing risks is contained, the associated rise in risk premiums will reduce the Russian banks' ability to tap these markets and raise funding costs, which they may find hard to pass on to clients."

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