Russian banks are being forced to close down their branches across the country due to declining profits, according to a recent report by RIA Novosti which cited Maxim Osadchiy, head of the analytical department of BKF Bank.
In April alone, Osadchiy said 101 offices were shut down, with Sberbank, the country’s largest bank, closing 49 branches. The Tomsk region, Tatarstan, and St. Petersburg were among the hardest hit, with the Stavropol Territory losing 64 bank branches in the first four months of the year.
The sharp decline in profits has affected even the top 50 Russian banks, with some experiencing a significant drop in the first quarter of 2024. Pochta Bank, Zenit Bank, and HKF Bank saw their profits fall by 31.2, 7.5, and 5.5 times, respectively.
Sponsored · Altamira Gold Corp.
Major players such as Alfa Bank, VTB, and Sovcombank also experienced a decrease in profits by more than half. Banks attribute this decline to sanctions, rising rates, and the payment of excess profit tax, also known as the “war tax.”
The Moscow Times notes that interestingly, while only one new bank branch was opened in Russia in 2023, credit institutions have been actively establishing their presence in the occupied territories of Ukraine. Promsvyazbank, TsMRBank, IS Bank, and RostFinance have in total opened 296 branches in these regions, bringing the total number of bank branches operating there to 503 as of May 1st.
Information for this story was found via Ria Novosti, Moscow Times, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
