Russian banks trying to make fast money to offset lower 2022 profits, screws might have to be tightened - Nabiullina

MOSCOW. March 2 (Interfax) - The Central Bank of Russia sees banks trying to make fast money and make up for their lower profits last year, but such behavior is fraught with increased risks and regulatory screws might have to be tightened as a result, Central Bank Governor Elvira Nabiullina said.

Speaking at the annual meeting of bankers with the leadership of the Central Bank, she said that last year the Russian financial system had "done itself justice."

"In previous periods, banks really did increase their safety margin. This proved sufficient not only to survive the unprecedented sanctions blow, but also to work smoothly, continue lending and support customers with credit holidays at the most difficult moment. The key thing is that banks have not simply gobbled up reserves made in past years, but have very quickly reconfigured business models and started earning again. This means that they retain the ability to provide resources needed to develop the economy," Nabiullina said.

She said for the Central Bank it was crucial for the banking system to be geared towards the long term and think about long-term sustainability.

"We are now seeing some attempts by banks to make fast money, compensating for the decline in profits last year, but the risk is that we might have to pay close attention to such behavior and tighten the regulatory screws, because, of course, we will not allow systemic risks to materialize and we will ensure that the banking system is sustainable in the long term," Nabiullina said.