Russian banks boost profits one-third in June owing to restoration of reserves, revaluation of federal loan bonds in anticipation of easing in monetary policy

MOSCOW. July 18 (Interfax) - Russia's banking sector boosted net profit one-third to 392 billion rubles in June 2025, excluding dividends from subsidiary banks, from 296 billion in May, the Central Bank of Russia said on Friday.

Growth was primarily owing to a large one-time restoration of reserves for other claims. Banks also reflected part of the positive revaluation of Russian federal loan bonds (OFZ) in profits, and several lending institutions received dividends from subsidiary financial companies, according to the Central Bank's overview of the sector's development. A successful June allowed the sector to repeat the profit result of 1.7 trillion rubles for the first half of 2024. According to the results of five months, banks were 10% behind last year's schedule.

Return on equity increased to 24.5% by the end of June from 18.9%.

Core profit increased 17% month-on-month to 323 billion rubles owing to a one-time restoration of large reserves for other claims. Moreover, the month-on-month increase in net profit in June resulted from growth in positive revaluation of OFZ by 30 billion rubles, up 1.3-fold, and dividends from subsidiary financial companies by 22 billion rubles, up twofold

Taking into account the revaluation of securities reflected directly in capital, mainly OFZ, the sector's overall financial result jumped to 640 billion rubles in June from 350 billion rubles in May, according to the overview. The large revaluation in June is associated with market expectations for easing in monetary policy in the second half of the year, which rose after the Central Bank reduced the key rate by 1 percentage point to 20% per annum, the regulator said.

Banks "have managed to maintain a wide margin in the conditions of tight monetary policy despite a noticeable increase in deductions to reserves owing to the gradual maturation of the retail portfolio," the regulator said about the results of the first half of the year.

The Central Bank's forecast for the profit of the banking sector in 2025 was confirmed in June at the level of 3-3.5 trillion rubles.