Overview

• Representatives of at least three systemically important Russian banks are preparing to seek Kremlin recapitalization within the next twelve months as loan defaults mount.
• Bank insiders warn that nonperforming corporate loans exceed the official four percent rate, indicating deeper stress in lenders’ balance sheets.
• Central Bank Governor Elvira Nabiullina insists the banking system is well capitalized and may release up to eight trillion rubles of macroprudential buffers if needed.
• The key interest rate remains at a near-record 20 percent, driving up borrowing costs for businesses and dampening economic activity.
• Heightened defense spending and Western sanctions have drained state reserves and frozen foreign assets, limiting Moscow’s capacity for further fiscal support.