Russia’s Bank Profits Fall to $ 1.9 Billion due to Corona

said on Monday that profits in Russia’s banking sector fell to 149 billion rubles ($ 1.98 billion) in November from 170 billion in October.

The central bank added that Russian banks achieved profits of 1.4 trillion rubles in the first eleven months of 2020.

Russia’s credit rating agency Accra said earlier this month that the combined net profits of Russian banks could drop to 735 billion rubles in 2021, or about half of what they are heading to achieve this year.

The same agency said this month that Russian banks will see a decrease in their collective net profit to 735 billion rubles (ten billion dollars) in 2021, which is nearly half of what they are heading to achieve this year.

The Russian banking sector was hit this year by the Coronavirus pandemic and related lockdown measures, which led to an economic contraction and a weakening of the ruble.

The central bank has warned that the Russian banking system may face an increase in bad loans due to the pandemic, something that banks have hedged by building up reserves.

“Russian banks have begun to increase reserve allocations in 2020, but this process will reach its peak in 2021. This will be reflected in net profit to a large extent,” Accra said in a report.

Accra expects banks in Russia to achieve net profits of 1.41 trillion rubles this year, down 16% from 2019. In the first ten months of 2020, they made 1.3 trillion rubles, according to the central bank.

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