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- Banking vector: every fourth credit institution in the Russian Federation has become unprofitable
Banking vector: every fourth credit institution in the Russian Federation has become unprofitable
The share of unprofitable credit institutions — this category includes not only banks, but also the same MFIs — reached almost a quarter in the second quarter of 2026, according to the Central Bank. Moreover, in the first seven months of this year, the number of players who went into negative territory jumped by about half, to 86. One of the main reasons is the growth of overdue debt, which requires banks to make reserves. And it is still extremely expensive to raise funds for them due to high deposit rates. This trend is not critical for large players, but it can create serious difficulties for small banks. Whether this will lead to the withdrawal of some of them from the market and how it will affect competition is in the Izvestia article.
How much has the share of unprofitable banks increased
The number of unprofitable credit institutions has increased significantly in Russia. Since the beginning of the year, it immediately jumped by 87% and reached 86 by August, according to the regulator's data, which was analyzed by Izvestia. Almost a quarter of the players were in the red. On average, in the second quarter of 2026, the share of such organizations was 24.5%. At the same time, the indicator was at the level of 18% a year earlier.
The number of unprofitable banks in Russia is slightly lower — as of August 2026, there were 65 out of 300 of them.
"We see losses mainly in banks with a low aggregate share in the sector's assets,— the Central Bank's press service told Izvestia.
At the same time, a negative result in itself does not indicate problems or loss of stability, the Bank of Russia emphasized. In general, the sector maintains stable financial results, and its profit by the end of 2026 may reach a record 3.9–4.4 trillion rubles, the regulator's press service said.
Nevertheless, the largest players have money — the top 10 banks accounted for about 75-76% of the sector's total profits, said Vasily Kutyin, Ingo Bank's Director of Analytics. At the same time, it is increasingly difficult for small participants to compensate for the rising costs.
Interestingly, compared to last year, the total losses of unprofitable banks in absolute terms even decreased and amounted to about 90.2 billion rubles in June 2026. But the difficulty lies in the fact that the number of players who have gone into negative territory has increased. The losses relate to an increasing number of small organizations.
At the same time, small and regional banks perform an important function, since they provide financial infrastructure in small towns and work with local small and medium-sized businesses, said Valeria Popova, senior analyst at the Rikom-Trust investment company. In addition, they close down niches that are economically less attractive for large banks.
Nevertheless, losses in the second quarter were shown not only by small organizations, added Natalia Milchakova, a leading analyst at Freedom Global. For example, one of the largest Russian banks, PSB, had a negative result for the quarter.
Why are credit institutions going into negative territory
The financial results of an individual bank's work are determined not by one factor, but by their totality, the press service of the Central Bank emphasized. These may include deductions to reserves for borrowers, the cost of funds raised through deposits, the level of competition, and seasonality of market conditions.
Vasily Kutyin believes that the Central Bank's rate is now becoming one of the main factors for banks. From June 2025 to June 2026, it decreased by 5.75 percentage points, to 14.25%. For small banks, this means a reduction in interest income: previously, they could earn money by placing free liquidity at a high rate, but now this source is gradually drying up. At the same time, deposits attracted during the period of expensive money are not getting cheaper. This creates an imbalance between the cost of funding and income.
Small banks cannot always reduce deposit rates following loan interest without risking losing part of their customer base, said Pavel Zholobov, Associate Managing Director of the NRA rating service. Therefore, they incur high interest costs for longer, which reduce profits.
The problem is compounded by the fact that the sales channels of small players are limited, Vasily Kutyin added. When the key rate decreases, they lose part of the income from the placement of funds, but they cannot fully compensate for this by issuing new loans — there is not enough business scale and customer base for this.
The demand for loans in small towns is also limited, and the incomes of the population there are lower than in large centers, Natalia Milchakova explained. The main clientele of medium—sized banks is small and medium-sized businesses, and it is in this segment that the quality of borrowers is currently deteriorating the fastest.
The growth of problem debts remains an important factor in increasing bank losses, Vasily Kutyin noted. For example, the share of such loans from legal entities in the fourth quarter of 2025 exceeded 11% compared to 5.8% a year earlier. The increase in delinquency forces banks to additionally form reserves at their own expense. And they attract money from the population through deposits with the obligation to pay interest, he said.
Banks' profits are also affected by the liquidity deficit, which by mid—August had grown to 2.7 trillion rubles, the highest level since March 2022, Vasily Kutyin continued. Simply put, banks do not have enough free money to conduct operations, so they have to borrow more actively from the Central Bank and other financial market participants, which generally costs them more than raising money through deposits.
Additional pressure is created by the Central Bank's restrictions on issuing loans to borrowers with a high debt burden, the expert added. They reduce banks' ability to grow their portfolios, which is especially dangerous for small players who have fewer alternative sources of income.
The negative revaluation of federal loan bonds (OFZ) is also putting pressure on the financial result, Pavel Zholobov noted. Their value dropped against the background of a slowdown in the rate of decline in the key. And government bonds occupy a significant share in the portfolios of banks, so their cheapening could negatively affect the profits of individual industry participants.
How many banks can leave the market
The growth in the number of unprofitable organizations does not yet mean that the banking system is facing the threat of a mass withdrawal of players, the press service of the Central Bank told Izvestia. They added that in recent months and years, the number of credit institutions has remained relatively stable.
At the same time, experts interviewed by Izvestia expect that the number of banks will continue to decrease in the coming years due to the consolidation of some players and the departure of others.
— Many small banks from the regions are literally doomed to be absorbed by larger market participants, — Natalia Milchakova emphasized.
Consolidation of the sector is already underway, and some organizations are actively looking for opportunities in the market to absorb small players and scale, said Pavel Zholobov from NRA. There are enough examples when owners of small banks lose interest in their credit institutions due to low returns and are ready to exit the market.
Changing capital requirements may accelerate the consolidation of banks, Natalia Milchakova believes. Starting in 2028, the minimum level for organizations with a universal license will begin to rise and by 2030 will increase from 1 to 3 billion rubles, and for the basic one — from 300 million to 1 billion. Because of this, about half of the banks, especially small and regional ones, will have to change their business model, look for a buyer, or merge with a more successful player.
As a result, the current situation reinforces the differences between large and small credit institutions rather than posing a threat to the entire system. Over the past ten years, the number of operating banks has almost tripled, the NRA recalled. And further halving, to 150 players, should not affect the stability of the sector.
Nevertheless, the departure of niche and specialized players may weaken competition and ultimately lead to higher prices for banking services. But such a scenario is not being considered in the coming years, the rating agency concluded. Small inefficient organizations will leave the market, but massive consolidation of the sector as a whole is not expected.
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