Alfa Bank is having a rough Thursday. CEO Rushan Khvesyuk gave a press conference in which he announced that the bank expects no profits for 2009: “We will channel a maximum of our profits to create provisions … We are urging everyone to work based on the most pessimistic, most conservative scenario … The most conservative scenario is a zero net profit for this year.“
Perhaps with some anticipation of this news, another Alfa Bank executive published an op/ed in the Moscow Times today about the proliferation of non-performing debt, and the danger of Russia’s experience with it. The upside? Bank consolidation might be coming along, so if Mikhail Fridman is able to get enough money out of the state kitty, we can expect Alfa to begin swallowing up a long chain of smaller banks at bargain basement prices.
Of course all of that will depend upon whether or not Alfa can survive the “shares for loans” bailout plan, which could pass control of the bank into Sechin Incorporated. Yulia Latynina may have been right when she wrote about Russia’s debt bartering system yesterday – it’s a survival tactic.