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Russian Banks Foreclose on Pigs, Lingerie

As defaults soar, banks stuck with weird collateral

By Jason Farago, Newser Staff

Posted Oct 26, 2009 6:21 AM CDT

(Newser) – With loan defaults soaring, Russia’s banks have had to seize a lot of collateral lately—and we’re not talking about houses. By year’s end, 20% of Russian loans could be non-performing, by Moody’s estimate. In order to recoup those losses, the banks have accepted controlling stakes in a lingerie retailer and a food store—and in one case, 40,450 pigs, Bloomberg reports.

Banks aren’t happy about the situation. “We have no idea how to build roads, milk cows or pour metal,” said the head of one bank. “We’re finance professionals.” The problem is especially bad at the state-run banks, where strange collateral backs as much as 20% of the loans, according to one banker. “State banks are burdened with social responsibility,” says another bank exec. But “even they can’t afford to give money away.”

A farmer washes pigs at a pig farm in Medan, North Sumatra, Indonesia, Thursday, April 30, 2009. (AP Photo/Binsar Bakkara)

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Russian Banks Foreclose on Pigs, Lingerie

As defaults soar, banks stuck with weird collateral

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More Newser Stories

Feds Sue Deutsche Bank Over Reckless Mortgage Lies

$1B suit may be first of many

'Sexy Spy' Anna Chapman Lands New Job

Her new boss? FondServisBank

It's Official: No More Overdraft Fees Without Opt-In

Feds go after bank fee 'profiteering'

Financial Reform: 'Punks' Take on Plutocrats

GOP argument against reform is upside-down, writes Paul Krugman

Dems May Cave on Consumer Agency

Proving they serve banks, not families, says Elizabeth Warren

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Russian Banks Foreclose on Pigs, Lingerie

As defaults soar, banks stuck with weird collateral

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OTHER STORIES ON OUR RADAR

Russia • bank • credit market • banking • collateral • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Feds Sue Deutsche Bank Over Reckless Mortgage Lies

$1B suit may be first of many

'Sexy Spy' Anna Chapman Lands New Job

Her new boss? FondServisBank

It's Official: No More Overdraft Fees Without Opt-In

Feds go after bank fee 'profiteering'

Financial Reform: 'Punks' Take on Plutocrats

GOP argument against reform is upside-down, writes Paul Krugman

Dems May Cave on Consumer Agency

Proving they serve banks, not families, says Elizabeth Warren

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?