Filipp Gabunia delivered a speech at the Financial Stability Review press conference for the period of 2024 Q4 to 2025 Q1. He noted that the economy has been expanding over the past six months, although at a slower pace. “Most companies are still making a profit,” he stated, adding that banks and other financial institutions remain stable due to conservative regulation.
Gabunia emphasized that there are no immediate threats to financial stability but assured that developments are being monitored closely. He highlighted five vulnerabilities in the Russian financial sector, starting with risks in corporate lending. A temporary reduction in corporate loans was reported between December and February, but by March-April, lending had resumed balanced growth. He confirmed no credit tightening is currently in place.
“Most industries are reporting high corporate profits by historical standards,” Gabunia mentioned, despite challenges such as sanctions and higher costs from inflation and interest rates. The introduction of a macroprudential buffer on April 1 aims to ensure accurate assessments of companies’ creditworthiness.
The share of non-performing corporate loans remains unchanged at 4% as of April 1. However, small and micro enterprises have shown a decline in solvency with struggling debt servicing rising from 5% to 9%. Gabunia recommended banks meet borrower requests for restructuring.
Leasing companies face an increase in non-performing assets since last year’s fourth quarter due to more non-payments. However, loan and leasing servicing remains generally good. Two-thirds of loans in the corporate portfolio are variable-rate loans which some analysts believe raise economic risks. Gabunia argued that these loans are extended to financially stable borrowers.
Retail lending and household debt have seen a slowdown with deteriorating loan quality. Measures were taken in advance to limit high-risk retail loans, resulting in a decline of unsecured consumer lending by 3.5% over two quarters and an increase in bad loans to 10.5%.
In the mortgage market, overdue loans have risen to almost 1%, double from a year ago, but improved lending standards aim to limit future risks. New risks accumulate in the housing market due to developers offering large-scale instalment plans.
Interest risk for banks emerged amidst high rates but margins remain relatively high at 4.2%. Banks need to improve interest risk assessments while being prepared for different rate paths.
Currency risk largely materialized due to sanctions but is easing through dedollarisation trends within the banking sector. Since December 1st, the ruble appreciated by 25% against the US dollar following its prior weakening since mid-2024.
In conclusion, Gabunia stated: “The situation in the financial sector is stable.” The Bank of Russia will continue monitoring financial stability closely and is ready to respond with regulatory easing if necessary.
