Russia's banking system on the brink as bankruptcies surge
An intelligence note seen by Reuters warns Russia faces a looming banking crisis as bankruptcies surged to about 500,000 last year, driven by deteriorating business loans and rising household debt after state credit programmes and lax lending. Banks’ subsidised lending to defence firms and homebuyers left them with bad debts, masked by government support; some banks warn up to 15% of consumer loans may be non-performing, while corporate loans could be around 10% non-performing. May GDP growth forecasts were cut to 0.4% for 2026 and 1.4% for 2027, with analysts suggesting the economy may already be in recession. The EU is weighing sanctions targeting more banks and other sectors, adding pressure to Russia’s strained financial system.