Russian banks score whopping $36.8B profit, leaving central bank stunned

Russian banks posted record profits of 3.3 trillion rubles ($36.8 billion) in 2023, a significant increase from the previous year’s profit of 200 billion rubles. The surprising performance was driven by the demand for mortgages and loans to finance large business acquisitions. The Russian central bank expressed surprise at the sector’s success, as earnings had considerably dropped in 2022 due to Western sanctions imposed following Russia’s invasion of Ukraine. Mortgage lending increased by 35% in 2023, with many Russians taking advantage of state-backed subsidized mortgage rates. Corporate lending also rose by approximately 20%, although it was not specified where the loans were allocated. However, the central bank warned that consumer and corporate lending growth is expected to slow down in the coming year, potentially impacting bank profits.