Published on: 2026-06-01
Source: Central Bank of Russia – Central Bank of Russia –
An important disclaimer is at the bottom of this article.
Let me remind you that in the previous Review we highlighted three key vulnerabilities: credit risk in the corporate sector, the debt burden of households, and the risks of project financing. All of them remain relevant.
Starting with companies’ credit risks.In conditions of economic growth slowdown, it is especially important to monitor the financial condition of the corporate sector. According to Rosstat data, last year the profit of companies (excluding financial organizations) decreased slightly. This was primarily due to the decline in prices and demand in the global hydrocarbon market. To a lesser extent, growth in costs and high interest rates also had an impact.
As a result, the debt burden of the largest companies has increased somewhat: the “Net debt / EBITDA” indicator for the year rose by 0.4 to 2.2. This indicator is historically low and comfortable, but, of course, we focus not so much on the average level as on how the debt burden is distributed among companies. It is important that the share of companies whose operating profit is not enough to service the debt is almost not growing and stands at 9%. Most companies maintain creditworthiness.
The share of corporate loans has remained around 4% of the loan portfolio over the past year and a half. At the same time, for large companies, this indicator has even slightly decreased since the beginning of 2025—from 3.3% to 3.1%. This is partly related to restructurings. However, there are cases when banks artificially underestimate reserves. We have extended the bank recommendation action until July 1 of this year—to carry out restructuring for borrowers who have faced temporary difficulties but have potential for restoring financial stability. In such cases, we expect banks to increase reserve allocations.Also, from March 1, we increased the macroprudential surcharge on loans to large companies with a high debt burden. All this will help protect against the growth of corporate credit risks thanks to additional capital and reserves.
The situation with servicing loans for small and medium-sized businesses is more complicated. In this segment, the share of bad loans increased from 5.9% at the beginning of 2025 to 7.6% on April 1 of this year. However, the total amount of problem debt is small and does not pose systemic risks. At the same time, banks are also cooperating with entrepreneurs and conducting restructurings.
In the first quarter of this year, the overall economic profit decline accelerated somewhat. This was due to the drop in oil prices at the beginning of the year and a slowdown in domestic demand. However, against the background of the situation in the Middle East, prices for many of our export goods began to rise. Therefore, an increase in income in a number of sectors can be expected. In addition, the economy will be supported by the easing of monetary policy. More than two-thirds of corporate loans have been provided at floating rates. This means that with the decrease in the key rate, interest payments automatically decrease.The rate has already dropped from the peak level by 6.5 percentage points. Therefore, we expect that most companies will be financially stable.
Let’s move on torisks of project financing and mortgages. According to our assessment, the construction industry is recovering its stability. From January to April, the area of sold housing increased by 8%. The level of sales of newly built housing across the country is good — more than 30%. In some regions, there is an excess of supply.
Most construction industry companies remain profitable. The sales profitability of the largest developers, according to IFRS data, last year remained at the level of previous years. The situation is more complicated for companies that have accumulated increased debt burdens. However, thanks to the escrow mechanism, citizens’ funds are protected: in the worst case, the money will be returned to the shareholders. At the same time, banks financing the projects are no less interested in the completion of house construction. If necessary, banks are ready to go towards the developers, as stopping the project is the least advantageous strategy.If necessary, banks can complete the project themselves or transfer it to other developers. Such cases do exist. Overall, the level of loans in project financing is slightly more than 1% – this is very little.
The share of problematic mortgage loans has slightly increased over the past 6 months and amounted to 1.8% as of April 1. At the same time, the quality of servicing loans issued last year is significantly better than that of loans issued two years earlier, during the overheating period. The growth of overdue payments in mortgages in recent years has been largely related to loans for the construction of private houses, where the share of loans with overdue debt exceeding 90 days is 4.6%. This is 5 times higher than for loans to purchase new apartments.To limit risks, since October 1 of last year, we have established limits on the issuance of such loans to borrowers with a high debt load and are working on the issue of accounting for increased risk reserves on loans for individual housing construction without using escrow accounts.
Вin the previous ReviewWe noted risks of installment plans in the housing market. Now it can be said that the situation with the sale of housing on installment plans has stabilized. The debt of citizens to developers as of mid-last year is estimated at about 1.5 trillion rubles. Nevertheless, to limit risks in the future, we plan some changes. When forming reserves in project financing of housing, banks should assess risks associated with installment plans. At the same time, we expect that as market mortgage rates decrease, installment plans will gradually move to the background.
Now let’s talk aboutretail lending, where we were concerned about the high level of debt burden on the population.
We see that the debt burden of citizens on loans is currently decreasing due to an increase in incomes and a moderate growth of debts. As with mortgages, new unsecured consumer loans are entering delinquency much less frequently than those that were issued 2–3 years ago. The share of problem loans in this segment has increased slightly over the past six months and accounted for about 13% of the portfolio. However, if we had not taken measures to limit loans to borrowers with a high debt burden, the share of problem loans would have been much higher.We also stimulated banks to accumulate capital reserves that protect them from losses on problem retail loans.
Summing up, it can be said that vulnerabilities in the financial sector are not critical. The capital adequacy of banks as of April 1 reached almost 14% — a figure we last saw 3 years ago, before the start of the credit boom, when the regulatory ratio was seriously lowered.
In conclusion, a few words about the potential risks we see due to the situation in the global markets and in the Middle East.
Firstly, these are the risks of accelerating inflation in the world. Difficulties in the supply chain and rising prices in the global raw materials market lead to increased inflationary pressure worldwide. The situation is most complicated in developing countries and countries that are importers of energy resources. This may affect inflation in Russia and influence the trajectory of GDP.
Secondly, if the situation in the Middle East drags on, volatility in foreign financial markets and the slowdown of the global economy cannot be ruled out. How might all these risks affect us? Russia is now much less connected to foreign financial markets, but foreign trade still plays a significant role for us. In the event of a global economic slowdown, a decrease in demand for our exports can be expected.
Thus, the increase in world prices for oil and gas allows exporters’ revenues to grow. However, the longer the geopolitical tension lasts, the more likely negative consequences become. For long-term sustainability, a balanced fiscal policy and responsible behavior of companies are important. We, in turn, will monitor to ensure that the financial sector is stable and supports the economy.
Thank you for your attention!
Please note; this information is raw content directly obtained from the source of information. It represents an accurate report of what the source claims and does not necessarily reflect the position of MIL-OSI or its clients.