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Russian Banks’ Profits Plummet 40% in 2014

Amounted to 589 billion rubles (about $9 billion)

MOSCOW, January 21 (TASS) - The banks’ profits shrank last year as they had to create larger loan impairment provisions, which had grown by 42.2% since the start of 2014 compared with the 16.8% growth registered in 2013, the regulator said.

If oil prices stay at $40 per barrel in 2015, Russian banks will have to set aside 3 trillion rubles ($46 billion) for loan provisions, according to an estimate made by Russia’s largest state-owned lender Sberbank.

<figcaption>© Vladimir Smirnov/TASS</figcaption>
© Vladimir Smirnov/TASS

Russian Central Bank First Deputy Chairman Alexey Simanovsky said last November that Russian banks’ profits in 2014 would be 10% lower than in the previous year.

In 2013, Russian banks earned 994 billion rubles ($15.2 billion). Russia’s banking sector earned record profits of over 1 trillion rubles ($15.3 billion) in 2012.

Simanovsky said Russian banks may return to their record profits in 2015.

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