Banks have begun involving competitors in refinancing large loans and redistributing debt within syndicates, Deputy Governor of the Bank of Russia Olga Polyakova told RBC. Market participants are adapting to the planned tightening of regulatory requirements — although the timeline for implementation will be postponed.

Photo: Oleg Yakovlev / RBC

In 2025, major Russian banks have increasingly begun to “share” large loans they had previously issued by refinancing major corporate exposures and allocating the debt across banking syndicates, Deputy Governor of the Bank of Russia Olga Polyakova said in an interview with RBC. According to her, market participants are taking these steps to improve their concentration ratios on large borrowers.

“In principle, banks have two main ways to reduce concentration: decrease a specific borrower’s exposure by redistributing it within the banking sector, or increase capital to ‘dilute’ concentration.
Quickly and substantially increasing capital is much more difficult. The first option means that a bank may refinance an existing loan, distribute the debt across a syndicate of lenders, or use another bank’s guarantee,” Polyakova explained, confirming that such transactions have already taken place on the market.

As of 1 July 2025, the concentration ratio of large credit risks (H7) among the top-10 banks reached 361% — the highest level in three and a half years of observations, according to analysts at Expert RA.

How the Central Bank assesses the situation, which banks are “repackaging” previously issued loans for syndication, and what will happen with concentration-risk regulation — RBC explains below.

How banks’ concentration risks currently stand

High concentration of large-borrower risks has long been a structural issue in the Russian banking sector. The Central Bank has attributed this to three factors:

• Large Russian corporates are often bigger than the banks lending to them, causing the borrower’s weight relative to the lender’s capital to be excessively high.

• Due to recurring crises, banks have repeatedly received temporary or individual waivers on concentration ratios, masking underlying issues.

• High risk tolerance — both banks and borrowers are often interested in maintaining close, long-standing financial ties.

To contain this risk, several regulatory ratios apply simultaneously:

H6 and H21

Limit the maximum exposure of a bank or banking group to a single borrower or a group of connected borrowers.
Calculated as the ratio of all obligations of such a borrower (with applicable risk weights or coefficients) to the bank’s total capital.
Must not exceed 25% of capital.

H25

Restricts lending to related parties — subsidiaries, shareholders, or affiliated businesses.
Aimed at preventing capital extraction through insider lending.
Assessed using “motivated judgement.”
Limit: 20% of capital.

H7

Limits the aggregate amount of large credit risks of a bank.
The maximum allowable value is 800% of capital.

Analysts at Expert RA noted a sharp increase in the H7 metric in 2024 and the first half of 2025.

“We do not currently see further deterioration of this problem. However, concentration is indeed elevated on the balance sheets of certain banks,” Polyakova told RBC. She added that the regulator works “individually with each bank” where concentration is excessive.

“We see that some banks have already begun taking steps in this direction,” she said. Refinancing existing large loans to distribute the exposure among a syndicate is one of these methods.

How the Transfer of Loans into Syndicates Works

A syndicated loan is a large credit facility issued to a company—typically to finance a major project—by a pool of banks forming a syndicate. Lenders sign a unified loan agreement with the borrower, while a designated agent bank handles loan administration and payment processing. Financing may be provided in several tranches.

A standard bilateral loan issued by a single bank can later be syndicated, meaning the lead lender may sell part of its claims to other banks.

“Banks within a syndicate share risks and lower their concentration ratios, while nothing materially changes for the borrower — they continue making payments to a single counterparty, the agent responsible for collecting and allocating payments across the syndicate,” explains Yuri Belikov, Managing Director at Expert RA.

In 2025, second- and third-tier banks began entering syndicates more actively, VTB told RBC.

“This year we are seeing that deals traditionally financed by the top five Russian banks now also include banks from the broader top-30. Previously, long-term funding and complex structured deals were often obstacles for them,” said a representative of the bank.

This trend is also confirmed by Yulia Lapshina, Head of Structured and Complex Lending at Alfa-Bank.

For smaller banks, joining syndicates enables them to build expertise, adopt best practices from anchor banks, and gain access to major clients previously inaccessible due to limited bilateral limits or insufficient capital, VTB said.

Lapshina adds several more advantages:

• For the client:
  – a single point of communication via the syndicate arranger;
  – streamlined documentation and reduced administrative burden.

• For participating banks:
  – ability to finance clients beyond their bilateral limits;
  – access to complex transaction experience;
  – working alongside market-leading institutions.

• For the arranger:
  – additional fee income;
  – direct client engagement.

According to Alexander Aksakov, Senior Vice President and Head of Corporate & Investment Business at DOM.RF Bank: “A properly structured syndicate with many participants, each holding less than 50%, exerts less pressure on liquidity ratios than an equivalent bilateral loan. This is one of the reasons we see rising interest in syndicated lending—both for existing and new loans.”

He added that DOM.RF Bank is currently working with several market participants on syndicating previously issued loans and may soon complete its first such transaction. “We have several deals in preparation, and we know similar transactions are being worked on by others as well,” Lapshina noted.

She emphasized that Alfa-Bank prefers structuring syndicated loans so that these assets can be classified as high-quality liquid assets under regulatory rules, because: “…this improves the economics for banks.”

What Obstacles Exist for Such Transactions

Refinancing large loans through a newly formed syndicate is still not very common, Polyakova said.

Experts interviewed by RBC point out that while spreading risk is a clear advantage, there are also several challenges for both borrowers and lenders.

Valery Piven, Head of Financial Institutions Ratings at ACRA, explains: “A bank’s relationship with a large borrower is usually multi-layered, involving numerous banking services. With a package of services, the bank maximizes the value of the relationship. A syndicate reduces these advantages. In addition, syndication requires the bank to give up unilateral control over the borrower’s operations.”

He also notes that syndicates are not always attractive to borrowers:

• coordinating amendments to loan terms becomes more difficult;

• instead of negotiating with a single bank, the borrower must deal with a pool of lenders.

This view is shared by Andrey Goncharenko, Deputy CEO of PSK-Solutions: “From the borrower’s perspective, working with a syndicate—unlike holding several bilateral loans—requires more effort, responsibility, and internal resources. And in stressed situations, targeted negotiations with a single bank may be more effective than dealing with a united front of lenders.”

However, Goncharenko notes a potential benefit: “In response to a bank’s proposal to sell an existing loan and form a syndicate, the borrower can demand significantly improved terms—lower rates, longer maturities, softer covenants, or enhanced collateral structures.”

He adds: “For the originating lender, selling part of the loan into a syndicate is useful strictly for compliance with concentration ratios, and little else.”

What Will Happen to the Central Bank’s Concentration-Risk Requirements

In the summer of 2024, the Bank of Russia introduced a new regulatory concept that envisions tightening concentration-risk ratios for market participants. Along with modifying the calculation methodology for existing ratios, the proposal includes the introduction of a new metric — H30.
H30 is intended to limit concentration risks of banking groups on large clients, replacing the current H21 ratio.

In addition, the regulator discussed revising the approach to penalizing minor breaches of concentration limits. Under the earlier proposal, banks exceeding certain thresholds would fall into an “orange zone”. This would not result in license revocation but would require higher contributions to the Deposit Insurance Fund.

However, the implementation timeline has shifted. Instead of entering force in 2026, the H30 ratio will be introduced no later than 2027, Polyakova told RBC.

She added that requirements related to concentration will be tightened gradually until 2031.

“The main idea remains the same — banks will pay additional contributions to the Deposit Insurance Fund for elevated concentration levels.
We understand that banks cannot normalize accumulated concentration all at once, so we want to create an economic incentive to accelerate the process. As I mentioned, the mechanism is still being finalized; ‘orange zone’ was only a working title at the initial stage, and we are moving away from that terminology.” — Olga Polyakova

Author: Yulia Koshkina
With contributions from: Anton Feinberg

RBC, December 8, 2025

This article has been translated to English by PSK‑Solutions LLC. The original version in Russian is available here.

This is an unofficial translation provided for informational purposes only. All rights to the original content belong to the original author(s), and no copyright infringement is intended. While we strive for accuracy, slight discrepancies may occur in the translated version.