"Asset quality will see improvements next year as Russia pulls out of recession: Moody's forecasts that the 1 percent economic contraction in 2016 will be followed by a modest 1.5 percent real GDP growth in 2017, which should bolster corporate credit profiles," the report stated.
Additionally, Russian Central Bank figures indicate that the formation of new corporate non-performing loans have declined to pre-crisis levels not seen since 2014.
Moody’s assistant Vice President Petr Paklin explained that the investor’s service believes Russian banks have detected most challenges to their lending portfolios and does not anticipate a resurgence of new problems "absent a material external shock."
The report warned, however, that the clean-up of accumulated problems in Russian banks’ portfolios may take several years.
