Russian Banks Rake in Great Profits in First Half of 2019

Profit in the Russian banking sector in the first half of 2019 exceeded 1 trillion rubles ($15.88 billion), the Bank of Russia said on Wednesday, according to TASS.

“Net profit of the banking sector for the first half of 2019 amounted to 1,005 trillion rubles ($15.88 billion) against 634 billion rubles ($10.07 billion) in January-June 2018,” the regulator said.

Last month, the World Bank said Russia’s banking sector is stabilizing but remains at risk despite recent state bailouts of Russian banks totaling tens of billions of dollars.

The Washington-based lender estimated that state-owned banks now account for 62 percent of all assets at Russian banks following the closure of hundreds of lenders in recent years and the rescue of several major financial institutions.

“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report.

The warning comes less than a week after the World Bank, the lending arm of the International Monetary Fund, cut Russia’s 2019 economic growth forecast to 1.2 percent from a previous estimate of 1.5 percent because of oil production cuts.

While the bank said Russia’s macroeconomic and fiscal buffers were strong, economic growth prospects remained modest.

“Downside risks to Russia’s growth outlook stem from the potential expansion of sanctions, deterioration of financial market sentiment, souring global trade environment and a dramatic drop in oil prices,” the report said.