Moscow Credit Bank, Russia's third-largest private lender, had accumulated 671 billion rubles ($8 billion) in troubled corporate loans by the end of June, Bloomberg reported.
That sum amounted to more than 27% of the bank's entire corporate loan portfolio. The volume of such loans grew by 28% in just the first half of the year alone, a sign of worsening asset quality at the bank. Loans are classified as troubled when a bank believes the debt may not be repaid in full.
A bank built on risky bets
Moscow Credit Bank holds systemic importance status in Russia, meaning regulators consider its stability critical to the wider financial system. According to Bloomberg, its problems have been building since at least 2025 as the Russian economy has slowed.
Aggressive lending practices and a heavy concentration of borrowers in capital-intensive industries, ranging from coal mining and machine building to retail, left the bank exposed as those companies' finances deteriorated.
Rosneft and the central bank as a backstop
Two people familiar with the matter told Bloomberg that Rosneft, Russia's state-controlled oil giant, could serve as a potential source of capital for Moscow Credit Bank if the need arose. The Central Bank of Russia could also step in to support the lender given its systemic status, if required.
The bank's troubles mirror broader strain on Russia's financial system, driven by prolonged high interest rates, deteriorating corporate finances, an economic slowdown and rising inflation risks.
Bad loans climbing across the sector
Russia's central bank data shows that troubled corporate loans across the entire national banking system stood at roughly 12% at the end of June, up from 11.2% a year earlier. Over the same period, the share of risky loan restructurings rose from 3.5% to 4.9%.
Restructuring a loan on risky terms is often a sign that a borrower is struggling to meet its original repayment schedule, and rising restructuring rates typically precede further increases in bad debt.
Wider warning signs for Russia's economy
In June 2026, the Kiel Institute, a German economic research organization, said Russia's economy was showing signs of exhaustion. Bloomberg also reported that Russia's finance ministry and the Bank of Russia had warned President Vladimir Putin that spending on the war against Ukraine risked a dangerous expansion of the federal budget deficit.
The Washington Post has separately reported that Russians are withdrawing billions of rubles from banks amid fears their savings could be confiscated to fund the war. In the first two weeks of August, 286.4 billion rubles, nearly $3.4 billion, were withdrawn from Russian banks, according to the newspaper.
