Presenting its Financial Stability Review for 2025 Q4 to 2026 Q1, the Central Bank of Russia said the three vulnerabilities flagged previously, corporate credit risk, household debt burden and project finance risk, all remain relevant but are not critical for financial stability. Banks' capital adequacy stood at almost 14% as of 1 April 2026, while the central bank said most large corporates remain creditworthy, the construction sector is resilient and households' debt burden is declining, even as risks have become more visible in small and medium-sized enterprises, private house construction mortgages and some regional housing markets. In corporate lending, profits declined and debt burdens rose modestly, but the net debt to EBITDA ratio for the largest companies remained at a historically low 2.2 and the share of companies whose operating profit does not cover debt service was 9%. The share of non-performing corporate loans stayed around 4%, with the ratio for large companies edging down to 3.1%, partly because of restructurings. Against that backdrop, the central bank extended until 1 July its recommendation that banks restructure loans for borrowers with temporary difficulties while increasing provisions where problems are chronic, and it raised the macroprudential add-on from 1 March for loans to highly indebted large companies. In smaller businesses, the non-performing loan ratio rose to 7.6% as of 1 April, though the bank said the stock of problem debt does not pose systemic risk. In housing and retail lending, non-performing project finance loans remained just above 1%, mortgage problem loans rose to 1.8%, and private house construction loans showed the greatest stress, with 4.6% more than 90 days overdue. Debt owed by households to developers through instalment plans has stayed near RUB 1.5 trillion since mid-2025, and banks will be required to assess instalment-plan risks when setting provisions for housing project finance. The central bank is also working to ensure provisioning better captures the higher risk of individual housing construction loans extended without escrow accounts. In unsecured consumer lending, non-performing loans were around 13% of the portfolio, with earlier restrictions on lending to highly indebted borrowers and capital buffers cited as key mitigants. The review also highlighted external risks from Middle East tensions and global market disruption, including stronger global inflation pressures, foreign market volatility and weaker external demand if global growth slows. At the same time, the central bank said higher export commodity prices and lower borrowing costs from monetary easing should support many Russian corporates.
Central Bank of Russia2026-06-01
Central Bank of Russia says financial sector vulnerabilities are not critical, plans tighter housing project finance risk treatment
The Central Bank of Russia said in its Financial Stability Review for 2025 Q4 to 2026 Q1 that corporate, household and project finance risks remain but are not critical, with bank capital adequacy at almost 14% as of 1 April 2026. It extended its recommendation to restructure viable stressed corporate loans until 1 July, kept pressure on banks to provision for chronic credit problems and signaled tighter risk treatment for housing project finance linked to instalment plans and non-escrow individual house construction loans. Retail and mortgage arrears have risen only modestly overall, although stress is higher in SMEs and private house construction.