Russia’s banking sector will inevitably need additional government support, increasing fiscal and macroeconomic pressures on the economy, Ukraine’s Foreign Intelligence Service said.
The agency said Russia’s banking system lost key signs of resilience last year despite calming rhetoric from the regulator.
Net profit at Russian banks fell 8% from 2024 to $45 billion, while return on equity dropped to 18%.
The deterioration came amid tight monetary policy, with sharp increases in loan-loss provisions and higher funding costs.
“These metrics point not to a cyclical slowdown but to the onset of deeper dysfunction in the sector,” the service said.
At the same time, asset quality is worsening, the agency added. The share of nonperforming loans has risen to 11%, and to 12% for unsecured loans. Such default levels are incompatible with official claims of stability and point to systemic problems that can no longer be explained by isolated segments or temporary shocks.
Analysts at the Kremlin-linked Center for Macroeconomic Analysis and Short-Term Forecasting have effectively acknowledged the start of a systemic banking crisis, arguing the current appearance of stability rests not on genuine recovery but on the dominance of state banks, widespread restructuring of troubled assets and regulatory forbearance — a setup that merely postpones the reckoning and raises the risk of rapid, large-scale deposit outflows if conditions worsen.
“The declared resilience of Russia’s banking system looks artificial. The Bank of Russia has effectively moved to manual risk management, allowing banks to mask bad loans as restructurings. Under these conditions, official data only conceal the true scale of losses,” the agency said.
Ukraine’s intelligence service forecasts that Russia’s banks will inevitably require further government support, intensifying fiscal and macroeconomic strain and entrenching the crisis as a long-term factor.
Earlier reports suggested Russia is likely to lose half of its energy revenues this year.
