Russian banks posted record profits in 2023 in news that surprised even the country’s own central bank, showing how the state is weathering Western sanctions over the war in Ukraine.
The country’s banks raked in 3.3tn rubles (£29bn) last year, the Russian Central Bank (CBR) announced on Tuesday.
This figure is up from just 200bn rubles in 2022, when profits fell almost 90 per cent due to Western sanctions following Russia’s invasion of Ukraine.
Alexander Danilov, head of the CBR’s banking regulation department, said last year’s strong earnings were “somewhat of a surprise”, according to the Financial Times.
His department estimated in March that profits would be above one trillion rubles but more modest.
The sector was boosted by strong mortgage demand and corporate lending, the central bank said.
Its figures showed annual mortgage lending grew more than a third (35 per cent) last year as Russians took advantage of subsidised rates for home loans. The state-run discount scheme is reportedly being winded down.
Russian corporate lending increased 20 per cent, according to the CBR, with 500bn rubles in loans tied to deals with foreign businesses leaving the country.
Russian firms have been snapping up assets from international businesses that exited the sanction-hit market.
Reuters reported that Danilov said consumer and corporate lending growth would likely slow this year, leading banks’ profits to drop to 2.3tn to 2.8tn trillion rubles.
Overall, the country’s economy is expected to grow 2.6 per cent in 2024, according to the IMF – doubling its forecast from October.