Russian banks make more money this year than ever

2021-09-19

Taking money away from people is going ahead big-time

At the XVIII International Forum “Banks of Russia – XXI Century”, held in Sochi, the head of the Central Bank of the Russian Federation Elvira Nabiullina said that by the end of 2021, Russian lending institutions are expected to have a record profit of two trillion rubles, TASS reports. During the crisis year of 2020, domestic bankers made 1.6 trillion rubles.

“Banks [during the pandemic] not only avoided large losses or a significant deterioration in portfolio credit quality but also maintained their profit margin. This year, thanks to the continued growth of business and low expenditures on reserves, banks will gain record profit”, – the news agency quotes the head of the Central Bank of the Russian Federation.

Elvira Nabiullina is giving a speech at the banking forum “Banks of Russia – XXI century”

In her speech, Elvira Nabiullina called on bankers to more actively participate in projects aimed at long-term economic growth and development of human capital:

“Banks should be more actively involved in projects that contribute to long-term economic growth, productivity gains, and the development of human capital. In the new reality, we should go out off the beaten track of revolving lending to large corporations, pawnshop lending of real estate, mergers and acquisitions, and issuing consumer loans so that to solve such challenging tasks as promoting energy transition or sustainable development of small and medium-sized business. “

The incomes of domestic bankers have been rising up for years. And the state plays a key role in this regard.

For example, a mortgage subsidy program. In just seven months of 2021, the total amount of mortgage loans issued was up to 3 trillion rubles, which is 64% higher than the same period last year. As for borrowers, nothing has changed for them: all the “benefits” have been offset by the rise in housing prices.

The Government helps bankers to collect debts from ordinary people. Just this morning, it was reported that there would be no driving allowed on toll roads for those who owe money to the bank in 2022. And thanks to the actions of the Central Bank of the Russian Federation, the owners of lending institutions were given the opportunity to take away the only housing from their debtors.

We all know too well the way bankers “contribute to long-term economic growth”. We have recently written about Sberbank bringing into bankruptcy one of the largest agricultural companies in the Sverdlovsk region, Polevskaya Ferma LLC. Donskoy shipbuilding and ship repair plant close-down due to a debt of 4 million rubles also may be recalled. The debt to the banks of the United Aircraft Corporation of 530 billion rubles comes to mind as well. At this rate, we will be waiting for “long-term economic growth” for quite a long time.

But we could allow ourselves to be happy about the opening of a multimedia fountain by Sberbank in Lipetsk. Perhaps, big guns of the financial world call this “investing in human capital”

Multimedia fountain in Lipetsk

The rising prosperity of the banking sector was also due, to an extent, to an increase in microcredit lending. For example, Sberbank  launched a service for issuing payday loans in May. And then the trillions of rubles allocated from the budget “to support people” are running through banks as credit payments from low-income Russians.

Well, in short, while the ordinary people’s life keeps getting much harder, financial tycoons have a really beautiful life.