Monday, June 18, 2018

Sberbank financials may take hit as new consumer protections take effect

A recent memorandum on a eurobond issue by Sberbank, Russia's largest bank, said last week a new consumer protection law that prohibits lenders from making loans that exceed market value by 33 percent could have a negative impact on the bank's financials.

Under the new law, which was adopted in December and takes effect on July 1, consumers are not penalized for early prepayment, which can be done without notifying the bank if it is within two weeks, or a month for special purpose loans. The bill also introduces substantial changes in stipulating the disclosures banks must provide to customers, Ural Business Consulting reports.

"If one considers the fact that Sberbank's retail segment is a large part of the business, the new limitations and requirements might result in a decrease in the interest income and an increase in operating costs, which, in its turn, could make a negative impact on Sberbank's business, transaction results, financial terms, and prospects," the memo said, Ural Business Consulting reports.