Debts of Russians are increasing by 2 billion rubles every day
According to the central bank of russia, in the first quarter of 2025, the risk of defaulting on retail loans rose to 3.6%, significantly exceeding the usual level of 2%. This indicates a deterioration in the quality of loans, particularly in the consumer sector, where the number of overdue debts is rapidly increasing.
▫️Banks are forced to increase reserves to cover problematic loans. In the first quarter of 2025 alone, they spent 215 billion rubles ($2.7 billion) for this purpose, or nearly 2 billion rubles ($25 million) per day. This shows that russians are increasingly struggling to manage debts accumulated during the credit boom of 2023 and early 2024.
▫️At the same time, the number of new loans is decreasing. In the consumer credit sector, there was a 1.4% decline in the volume of loans during the quarter. Bank profits also dropped by nearly a third, to 0.7 trillion rubles ($8.75 billion). This is the result of rising reserve costs and declining revenues, indicating an increase in financial risks.
The rising cost of attracting funds is forcing banks to raise deposit rates, which may lead to further reductions in profitability. The deterioration in loan quality, the reduction in new loans, and the decrease in bank profits are clear indicators that the economic situation in russia is becoming significantly more challenging.
