Russian banks make record US$36,8bn

RUSSIAN banks made 3,3 trillion roubles, or US$36,8 billion profit, last year, marking a record high, the country’s central bank announced on Tuesday.

The performance came as somewhat of a surprise, said Alexander Danilov, the head of Russia’s central bank’s banking regulation department, according to the Financial Times.

The earnings are a massive jump from the sector’s 200 billion-rouble profit in 2022 — when profits tanked 90 percent from a year earlier amid Western sanctions over Russia’s invasion of Ukraine.

Russia’s banking sector’s performance last year was spurred by demand for mortgages as well as loans to finance large business acquisitions, the central bank said in its statement on Tuesday.

Mortgage lending last year rose nearly 35 percent from a year ago as Russians rushed to buy homes on state-backed subsidised mortgage rates, said the central bank.

Russian authorities have started winding down the discounted mortgage program,the independent Russian news outlet The Bell reported in September.

At the time, mortgage rates in Russia were around 15 percent,but the subsidised mortgage rate was 8 percent. Families got a bigger discount with a mortgage rate of 6 percent.

Meanwhile, corporate lending in Russia rose about 20 percent last year from a year ago, the country’s central bank said on Tuesday. It didn’t specify what the loans went to, but Russian businesses have been buying up assets from international firms that left the market.

The latest central bank report is another indication of unusual resilience in Russia’s sanctions-hit economy nearly two years into its war in Ukraine.

Reports suggest that much of the country’s growth is due to massive military and government spending. — Bloomberg.