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On countercyclical buffer to capital adequacy ratio

24 February 2016
Press release

The Bank of Russia decided to retain the countercyclical capital buffer (CCB) rate for Russian credit institutions at zero per cent of risk weighted assets.

Lending activity in the economy remains moderate. Loans to non-financial organisations and households (in rubles and foreign currency) grew by 7.6% year-on-year as of late 2015 Q4 and by 4.3% as of late January 2016. Total loans to the economy increased over the said periods by 0.2% and 1.6% respectively not taking into account the revaluation of FX loans. The negative values of credit gap assessments (the credit-to-GDP gap is defined as the difference between the actual ratio of loans adjusted to FX revaluation to GDP and its long-term trend) and the dynamics of other indicators taken into account while deciding on the rate of the countercyclical buffer testify to the retention of the declining phase of the credit cycle. Given the situation, the Bank of Russia deems it expedient to leave the countercyclical capital buffer unchanged at zero per cent.

The Bank of Russia considers changes to the CCB rate on a quarterly basis. Should the Bank of Russia Board of Directors decide to set the CCB rate at above zero per cent of risk weighted assets, the appropriate requirements will become effective no sooner than six months and no later than 12 month from the decision announcement. This will allow the banking sector to timely plan capital management, including the policy of dividends and compensations.

The countercyclical capital buffer is applied in compliance with Basel III approaches stipulated by Article 67 of the Federal Law ‘On the Central Bank of the Russian Federation’ and Bank of Russia Ordinance No. 3855-U, dated 30 November 2015, ‘Amending Bank of Russia Instruction No. 139-I, Dated 3 December 2012, ‘On Banks’ Required Ratios’ from 1 January 2016.

The Bank of Russia Board of Directors will hold its next CCB rate review meeting in May 2016.

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