According to a report by Bloomberg on Thursday, executives from over three major Russian banks have been discussing the possibility of seeking government assistance in 2026 in private meetings. They are concerned that the level of non-performing loans on their books may continue to deteriorate in the coming year.
At least three banks, identified by the Russian Central Bank as having systemic importance, are reportedly considering capital restructuring within the next 12 months. These banks are engaging in internal discussions on how and when to approach the Central Bank for potential assistance. The condition has arisen as their evaluations of loan quality indicate a much lower level than the official data suggests.
Sources who requested anonymity mentioned that the decision to seek assistance depends on whether the scale of non-performing loans will continue to rise in the next year. The topic is becoming increasingly urgent within the banking sector as a whole.
Despite appearances, the Russian banking system seems relatively healthy on the surface. Even with the Central Bank’s benchmark interest rates nearing historical highs around 20% and the increase in non-performing loans from both corporates and households, bank profits remain robust.
Official Russian data indicates that the level of bad loans in banks is far below the levels seen during past financial crises. As of April 1st, non-performing loans by corporate borrowers stood at 4%, while unsecured consumer debt with overdue payments of 90 days or more accounted for 10.5%.
On July 2nd, the Central Bank Governor Elvira Nabiullina denied the existence of systemic risks in the banking sector during a financial forum in St. Petersburg. She claimed that the Russian banking system is “well-capitalized” with reserve capital of 8 trillion rubles (around $102 billion).
The Central Bank has stated that it may release capital buffers, allowing banks to absorb losses and operate temporarily with lower capital ratios. This action could alleviate some pressure on the banking system unless the amount of losses exceeds the expected absorption range.
Bank executives have started issuing warnings about the outlook for 2026. Herman Gref, CEO of Russia’s largest bank Sberbank, mentioned at the June annual general meeting that due to deteriorating loan portfolio quality, businesses are increasingly in need of debt restructuring.
“It’s obviously not an easy task,” he said. “I hope we can find common solutions as we always have to get through these difficult times.”
As reported by Kommersant on July 1st, Dmitry Pianov, First Deputy Chairman of VTB, Russia’s second-largest bank, indicated that personal non-performing loans in retail business portfolios reached 5% in May, totaling 377 billion rubles.
This indicator has increased by 1.2 percentage points since the beginning of this year. Pianov expressed that by 2026, the ratio of non-performing loans could reach 6% to 7%, although it would remain lower than the peak levels of 2014 to 2016 (8% to 10%).
Sources from two systemically important Russian banks revealed that despite ongoing restructuring and sufficient reserves, customers are worried about high interest rates, and the ratio of non-performing loans is still on the rise. Due to the nature of internal affairs, these executives prefer to remain anonymous.
One source indicated that while there are almost no signs of crisis at present and issues could be resolved through capital injection, the classification of a large amount of data as confidential by the government hinders public understanding of the full picture.