Russia

Russia's banking sector is dominated by state-controlled institutions and has become more concentrated. Of 357 operating credit institutions at 1 September 2026, 12 are designated systemically important, and the five largest banks held 67.7% of sector assets of RUB 215.9tn at 1 August 2026. A small number of foreign-owned subsidiaries, including Raiffeisenbank and UniCredit Bank, remain among the systemically important credit institutions.

Banks are primarily domestic lenders funded by customer deposits. Claims on companies reached RUB 112.2tn at 1 September 2026, up 13.4% year on year, with rouble corporate loans accounting for almost all of August's growth. Retail credit is shaped by state-subsidised mortgage programmes, which made up about 56% of mortgage lending in August 2026, while the Bank of Russia uses macroprudential limits to restrain unsecured consumer lending, where non-performing loans accounted for 13.2% of the portfolio at 1 July 2026.

Profitability is high. Sector net profit was RUB 440bn in August 2026, an annualised return on equity of about 24%, and in September the Bank of Russia raised its forecast for 2026 sector profit to RUB 3.9–4.4tn, citing higher-than-expected margins and lower provisioning. The sector capital adequacy ratio recovered to 14.1% at 1 July 2026 from 12.5% at the start of 2025, and a 0.5% countercyclical buffer has applied since July 2025. Unrecognised losses on government bonds were estimated at RUB 0.5tn, about 2% of capital.

The operating environment is defined by sanctions and tight, if easing, monetary policy. The EU's 20th sanctions package, adopted in April 2026, extended its transaction ban to 20 more Russian banks, bringing the total to 70, and prohibited use of the digital rouble. The Bank of Russia has lowered the key rate from 21% in mid-2025 to 14%, but inflation of 6.3% in early September 2026 has led it to pause. Credit risks are concentrated in highly leveraged large corporates and unsecured consumer lending.