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MOSCOW, May 26 (Reuters) – Russian bank profits fell to 32 billion roubles ($451 million) in April, a six-fold drop from March, its central bank said on Tuesday, as a countrywide coronavirus lockdown took its toll.
Banks in Russia have sharply increased provisions for bad loans, warning they may miss profit targets as Russians feel the economic and social effects of the lockdown which was imposed in late March.
Russia’s central bank said that corporate loans were up by 1.4% month-on-month in April as the companies raised loans instead of issuing bonds, while retail loans were down by 0.7% as Russians moved to pay off debts.
Retail loans were down by nearly 60% in year-on-year terms, Reuters calculations based on the central bank data showed.
This drop is comparable to Russia’s 2014-2015 crisis, when it hit by Western sanctions for its role in the military conflict in eastern Ukraine and annexation of Crimea.
Consumer loans, along with lending to small and medium-sized businesses, will be hardest hit by the economic fallout from the coronavirus, but Russian domestic banks will fully recover in two years, ratings agency Moody’s predicts. ($1 = 70.9300 roubles) (Reporting by Maria Grabar; Writing by Gabrielle Tétrault-Farber and Katya Golubkova; Editing by Mark Potter and Alexander Smith)
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