Russia’s financial system is facing a looming crisis, with its banking sector described as a “time bomb” amid tightening sanctions and soaring interest rates, according to reports from The Moscow Times.
The Central Bank of Russia revealed that the volume of problem loans — debts companies or individuals have failed to repay on time — has ballooned to 10.4 trillion rubles (£100.7bn), a level that is raising alarm among regulators and industry insiders alike.
Several sectors are already feeling the strain. Mining companies have been hit by weakening demand and falling commodity prices, while the oil and gas industry has suffered under the double blow of Western sanctions and a slump in crude prices.
The central bank estimates that these troubled loans now equate to around 24% of Russia’s federal budget, underlining the scale of the risk building within the system.
Senior bankers have privately warned that the situation could spiral into a full-blown economic crisis within the next year, with concerns mounting that prolonged financial pressure and limited access to international markets will push more firms into default.
With credit stress escalating and economic headwinds intensifying, analysts fear the Russian banking sector could soon become the next flashpoint in the country’s increasingly fragile economy.
