A banking crisis in the Russian Federation is becoming inevitable.
Last week, Russia's largest bank, Sberbank of Russia, announced its intention to cut 20% of its head office staff. The bank could be suspected of PR activity, but the cuts are to happen super fast.
Such a decision is surprising against the backdrop of Sberbank's more or less acceptable reporting and significant profits. However, in Sberbank's case, the reporting is merely a smokescreen against the backdrop of a significant deterioration in the quality of the loan portfolio of Russia's largest bank, which is predicted for the first half of 2026.
In principle, Putin's team could have silenced the head of Sberbank, Herman Gref, but the phenomenon of deteriorating asset quality in banks has already reached such a scale that it cannot be hidden, especially since Sberbank accounts for about 50% of the banking system.
Last week, the CBR raised its forecast for the cost of credit risk in Russian banks in 2026 and simultaneously lowered its profit expectations. The CBR, unlike Sberbank, was quite modest in its estimates and limited itself to cosmetic changes in forecasts.
However, the actual statistics for the third quarter of this year showed that overdue business loans in the Russian Federation increased by 5.5% to 10.4 trillion rubles. The trend affected troubled industries, but some of their loans have not yet been included in the negative statistics.
For example, the coal sector massively applied for restructuring in the summer of 2025; these loans became "new" and therefore have not yet become overdue. The same trends applied to metallurgists, civil engineering, and a number of other industries.
So Herman Oskarovich Gref is fully aware of what awaits his bank and how quickly the paper profits from the financial statements will dissolve into the problem portfolio.
But the Central Bank of Russia continues to present the tsar with rosy statistical reports, although it formally acknowledges the existence of the problem.
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