Russian banks in 2024. A strong growth of profitability achieved

The banking sector in that country thus shows that it recovers from the consequences of sanctions. Recovery happened primarily thanks to high interest rates and solid credit growth.

The key interest rate of the Central Bank is now 21 percent, which increased the net interest margin of banks. However, it is noticed that the growth of lending is slowing down. Some companies give up searching for funding sources for development projects due to growing costs and prefer to decide to keep money in deposits. The Central Bank announces that the profitability of banks will be lower this year.

German Gref’s Chief CEO called high interest rates “Colossal Challenge” for banks and companies. The first man of the second largest bank, Andrej Kostin, stated that stricter regulations would also negatively affect profitability.

Lending growth slowed 2024. years, both for companies and citizens. This is the most sensory in housing loans, where growth dropped from 34.5 percent in 2023. to 12.4 percent last year.

If the bankruptcy wave in 2025 is threatened?

On the other hand, the growth of credit lending has led to an increase in non-payment loans, although their total percentage fell to 3.8 percent due to the growth of the overall portfolio. One of the leading analytical centers advised by the Government warned that this year there could be a wave of bankruptcy in the corporate sector, reuters reports.

The largest Russian MsTs mobile operator announced that in the third quarter 2024. recorded a decline in profitability of 88.8 percent on an annual basis due to increased interest costs. Russian state railroads face larger interest expenditures, which amount to four billion dollars.

“Companies in most sectors are still quite profitable, which allows them to service debts at current interest rates. However, difficulties can occur in a high level of indebtedness companies, “the Central Bank remarks.