Sberbank records increase in applications for loan restructuring among households and businesses, expects decrease in banking sector profit

ST. PETERSBURG. July 2 (Interfax) - Sberbank has recorded an increase in applications for loan restructuring by private individuals and legal entities, and predicts that 2025 and 2026 will not be easy for banks, but they will cope, CEO Herman Gref said.

"We are not only seeing a decrease in lending rates, but also, of course, a higher number of restructurings, applications for loan restructuring from both private individuals and legal entities. Of course, banks will feel the increase in bad debts this year, and we are expecting financial results across the banking sector to fall this year on the whole. Looking at the results from the first five months, banks' profits have fallen approximately 10%," Gref said during the Central Bank of Russia's Financial Congress.

"Therefore, we will see, of course, how the situation unfolds in the second half, but on the whole we predict that nothing terrible will happen in the banking sector and it will hold out - we will pay for that with our reserves, and therefore our profit margins, capital. But 2025 will not be easy for the banking sector, and neither will 2026, most likely," he said.

Russian Central Bank data indicate that domestic banks earned 1.3 trillion rubles in January-May, down 10% year-on-year from 1.4 trillion rubles minus dividends from Russian subsidiary banks. The CBR said that the result is primarily owing to growth in allocations to reserves since the beginning of the year amid the gradual maturation of the retail portfolio.

The CBR in June retained its forecast for the profit of the banking sector within 3-3.5 trillion rubles for 2025 and reported that there were no prerequisites for altering the profit forecast. According to the results of last year, banks generated a record 3.8 trillion rubles in profit.