Central Bank of Russia reports December cooling in lending and banks’ net profit falling to RUB 187 billion

The Central Bank of Russia published its review of Russian Banking Sector Development for December 2024, showing a broad cooling in credit dynamics as corporate and unsecured consumer loan portfolios contracted on the month, mortgage growth remained modest, and banks’ monthly profits fell sharply. The corporate loan portfolio declined by 0.2% in December due to large foreign-currency repayments, while corporate lending grew 17.9% across 2024, with more than half of the increase coming from segments described as less sensitive to interest rate rises, including earlier-launched investment projects and housing construction financing. Unsecured consumer lending fell 1.9% in December, attributed to macroprudential requirements and higher interest rates, though the portfolio was up 11.2% by end-2024 reflecting rapid growth in spring and summer. Mortgage lending rose 0.4% in December, with subsidised mortgages accounting for more than 80% of new loans, and annual mortgage growth slowed to 13.4%. Household funds with banks increased 7.2% in December, linked to advance payment of January social benefits and annual bonus payouts, bringing full-year growth to 26.1%. Banks’ net profit dropped to RUB 187 billion in December due to foreign-exchange revaluation losses and higher operating expenses; for 2024, the sector earned RUB 3.8 trillion (excluding subsidiaries’ revenues), while aggregate financial performance was RUB 3.4 trillion after negative securities revaluation recognised directly in equity.