Financial News and Economical Crisis

Pessimists believe that the fall of the country can bring down the next wave of crisis. Optimists specify that it would not be so strong as at the beginning of the year

Банкиров kill debts

Signs of recovery the financial sector - the gradual influx of deposits, the stability in the foreign exchange market and let the weak, but the growth of lending to legal entities - can be misleading. With the fall of the banking system begins to fever with renewed force. Today, at the forefront of emerging asset quality problems and lack of capital the banking system.

These factors will be decisive in the development of banks in the coming year , - considers the financial analyst rating agency Credit Rating Victor Shulik. One of the potential hazards that may pose a threat to the financiers in the coming months - the next wave devaluation of the currency, provoked by the need to repay foreign loans.

Until the end of 2009 Ukrainian companies and banks will have to pay about $ 13.5 billion, repayment of debts will peak in August-September. During these two months to repay sovereign Eurobonds Eurobonds Ukraine and Naftogaz ($ 500 million), eurobonds Kyivstar and Ukreximbank ($ 266 million and $ 250 million respectively), synditsirovanny credit FUIB at $ 154 million and other borrowings. In addition, there is still an option for early repayment of Ukrainian sovereign Eurobonds for $ 700 million This is a substantial burden on the reserves of the NBU and the International Monetary Fund - stressed economist Astrum Investment Management Alexei Blinov.

Although a significant portion of summer tranche of IMF credit to be directed to the payment of foreign debts States (according to the Ministry of Finance, $ 1.5 billion from $ 2.8 billion second tranche of the loan fund has already been sent to the relevant objectives), it is unlikely to deliver hryvnia new round of devaluation. If it was possible to agree on a restructuring of external credit, the course would remain stable. But given the complexity of the situation on foreign markets, lenders are unlikely to go to a large-scale restructuring. This could lead to shortages of foreign currency, which directly affect its value already this autumn , - said Victor Erasov, Director of the Department of Treasury BG Bank.

Analysts do not rule out that even under favorable circumstances hryvnia rate by the end of the year could drop to 8 hrn. /$. In the worst case, the national currency fall more than 9 UAH. /$. In a conservative scenario - compliance with the planned cooperation with the IMF on a program stand by, the minimum amount of the excess of imports over exports, favorable price conjuncture for Ukrainian goods on world markets, stable political situation in the country, etc. - hryvna rate may remainin the range 7,5-7,8 grn. /fall and $ 7,5-7,9 grn. /$ before the end of the year.

When negative developments, these values may be within 7,8-8 and 9,0-9,5 grn. /$, respectively, - the director of Treasury JSC Khreshchatyk Alexey Kozyrev. Budget accumulates problems and sources bezemissionnogo cover its deficit is not observed.

Prognoz IMF (8,68 UAH. /$ in 2009) is not a last resort. I think the autumn we will reach a peak, which was at the beginning of the crisis - 9,5-10 UAH ./$, - a financial market expert predicts Eric Naiman.

However, the optimists do not exclude that the National Bank will make every effort to keep the hryvnia at the edge of the abyss. Performance of the hryvnia /dollar in March 2009 suggests that the NBU is seeking to retain the level of not more than eight, and probably, considering the higher rate as a critical time for the banking system. I think the regulator is able to keep the exchange rate at that level - Concorde Capital economist believes Andriy Parkhomenko.

Autumn relapse

repeated weakening hryvnia rate, combined with a chronic fall in incomes of citizens will inevitably lead to an increase in debt issues of banks. Financiers do not save or preferential auctions held by the National Bank (at the request of the IMF official hryvnia rate to be as close to the market) or public program implemented by the restructuring of debt. Since the beginning of the year problem finuchrezhdeny assets increased by more than two times at about 5%. Given the dynamics of contributions to reserves over the past six months, the potential problem of debt (with a low probability of timely repayment) now reaches 12-15%.

I think by the end of the year's volume of debt issues of banks may be at the level of 8-10%. Yet the same amount to a non-hidden , - said Victor Shulik. The series of hard-core non-payers will be increasingly supplemented by corporate customers that borrow from the bankers hefty sum. If the bulk of the delay did individuals who received loans, mainly credit risk program (cash, credit, trust bezzalogovye credits, etc.), now grow the share of mortgage and auto, as well as the percentage of overdue credit portfolio of corporate clients. Volumes Restructuring (prolongation) of bank loan portfolios will be 25-60%, - supplemented colleague Alexey Kozyrev.

deteriorating quality of assets will result in problems for banks with capitalization and liquidity, and to the real sector - in the absence of borrowing. Probable second round of banking crisis, which will vary its structure from the first wave. If at the end of last year, leading to a worsening liquidity and as a result of the insolvency of individual banks was panicking people, the events will now unfold as follows: reduction in quality of assets - the worsening of liquidity - the panic — insolvency of individual banks, - the analyst believes the IG Socrates Mikhail Salnikov.

By the end of the year finuchrezhdeny problem can be two to three times more, but to support the state can claim only one. Government support should be limited to viable banks, which have the potential to very quickly restore lending to support the economy as a whole. For really really problematic finuchrezhdeniyam should apply a simplified procedure of bankruptcy, to ensure rapid access to funds for investors, - says the analyst of Renaissance Capital Anastasiya Golovach.

deeper had nowhere

fragile and may be emerging in recent months the trend of economic stabilization. May increase to 1.3% promproizvodstva allowed the Ministry of Economy to conclude that the worst times behind us and soon the economy starts to grow. However, the continuity of the depth of the fall production of the annual measurement (31.8% in January-May) shows that the bottom has not yet passed. While monthly figures show an improvement in volumes promproizvodstva, the chances for recovery of most industries because of low demand in the domestic and external markets is minimal. In this regard, we worsened the annual forecast of the fall promproizvodstva from 16,9 to 18,2%, - told Head of the analysis of financial markets, ING Bank, Alexander Pecheritsyn.

deplorable situation in the industry does not provide a basis for the rosy forecasts about the state of the economy as a whole. Until we see a decline promproizvodstva, the upward trend in inflation and unemployment, to talk about stabilizing the situation early on. Beginning in 2009 many companies have resided stably in the circulation and profits even last year, now the situation has changed. Therefore, there is a chance of further deterioration of the economic situation in end of the third quarter, - thinks Victor Erasov.

According to analysts, the decline in real gross domestic product in 2009 could reach 12.8%. However, actual results may be even worse. According to forecasts of international experts in the near future, the global economy can bring down the next wave of shocks. Worse during global economic crisis may be yet to come, - said the other day the head of the IMF Dominique Strauss-Kahn.

In this case, the chances of recovery of Ukrainian economy, record rates of growth which in previous years were provided by increasing foreign trade, delay until mid-2010. The good news is only that the Ukrainian economy has already fallen so deeply, and the demand of key Ukrainian exports are currently so low that even the entry of global economy in the new round of crisis has not significantly reduce the demand for domestic products. This means that the economy may prosest only slightly , - said Mikhail Salnikov.

Tatiana Ochimovskaya

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