Russian banks' profits will reach record levels around 3.3 trillion roubles ($36 billion) this year, the central bank said on Thursday, before dropping off by about 1 trillion roubles in 2024 as high interest rates cool lending growth.
Profits slumped by almost 90% in 2022 as the West imposed sweeping sanctions on Russia's financial sector over Moscow's actions in Ukraine, but banks have recovered this year through strong lending growth and high net interest margins, particularly thanks to the state's burgeoning defence budget.
"Lending accelerated in all segments in the third quarter, however a slowdown is possible at the end of the year," the central bank said.
Corporate lending growth of 5.9% year on year in the quarter was driven by demand for loans from state contracts, the replacement of external debt and growth in housing construction, the bank said.
The bank's 750 basis points of monetary tightening since July is expected to reduce demand for credit in the economy.
Widening interest margins, in spite of higher rates, have boosted profits, the bank said. It forecast banks' 2024 profits at 2.1-2.6 trillion roubles.
($1 = 92.5900 roubles) (Reporting by Elena Fabrichnaya and Alexander Marrow Editing by Mark Potter)