Support The Moscow Times!

Russia's Rosbank Plans to Cut Between 10-15% of Staff in 2015

A man walks past a branch of Rosbank in Moscow.

Russia's Rosbank, part of France's Societe Generale Group, plans to cut 10-15 percent of its staff this year, its head said Tuesday as Russian economic troubles weigh on the banking sector.

The bank will cut jobs by reducing its branch network and through a reorganization of its business structure, Chief Executive Dmitry Olyunin told journalists.

The bank, which had earlier flagged potential job cuts as part of its strategy for the next few years, cut about 8.5 percent of its staff in 2014.

It will continue to sell part of its problematic loans to reduce its loan-loss provisioning, Olyunin added.

Russia's economic slowdown, deepened by Western sanctions over Ukraine, low oil prices and sharply higher interest rates, has hurt banks' profitability.

Olyunin said 2015 demand for retail loans had slumped by 80 percent from a year earlier, while the bank's share of non-performing retail loans more than five days overdue was 12 to 15 percent higher.

"It's clear that retail lending in Russia will be under serious pressure as regards margins and volumes for the next few years," he said. "It's difficult to say how long, but minimum two or three years."

Olyunin said he expected Russian banks' retail loan portfolio to shrink by some 15 percent this year.

In the corporate sector, Rosbank expects a less dramatic rise in its non-performing loan (NPL) ratio since it focuses on large Russian companies, including exporters.

Olyunin said the bank's NPL ratio for corporate borrowers would likely rise by 1 to 1.5 percentage points from about 8 percent at the start of the year, according to Russian accounting standards.

He declined to give a forecast for Rosbank's financial performance in 2015.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more