Russian Banks Have a Chance to Beat the Revenue Record of IDR 558.3 ​​Trillion in 2023

MOSCOW – Bank- Russian bank It is projected that it will be able to break the revenue record in 2023. This was conveyed by the Deputy Governor Central Bank of Russia Olga Polyakova at a conference, early last week.

Last year, a sharp increase in mortgages as well as consumer and corporate loans, caused the bank to record a profit of 3.3 trillion rubles or the equivalent of USD 35.4 billion, which if converted into rupiah reached IDR 558.3 ​​trillion (exchange rate of IDR 15,773 per USD). Despite the hit. Western sanctions Russian banks are claimed to be able to show good performance.

The increase in credit distribution occurred even though the benchmark interest rate rose sharply, from 7.5% to 16%. The record earnings were also associated with revenue recovery, a significant reduction in costs associated with reserves, and income received from currency revaluation.

“We estimate banking sector profits to be at the 2023 level or slightly above,” Polyakova said as reported by RT.

This increase is in line with previous projections, where in March the regulator estimated the sector’s profit in 2024 at between 2.3-2.8 trillion rubles (USD 24.6 – USD 30 billion).

Russia’s banking sector is no exception to be hit under the pressure of unprecedented Western sanctions in 2022, following the start of Moscow’s special military operation in Ukraine. Most Russian banks are cut off from the Western financial system. Major financial institutions are also prohibited from using the SWIFT clearing mechanism.

The Bank of Russia, however, said it was ready to deal with the situation. The West initially imposed sanctions on Moscow in 2014 following the Crimea referendum that resulted in the region joining Russia.

At that time, the financial sector was the target of sanctions. Large banks are restricted from access to Western debt and capital markets. In response, central banks began increasing the country’s financial sovereignty by developing their own payment systems.