Russian banking's horizons narrowed by sanctions

Significance

Cut off from international financial markets, Russian banks are struggling to make cross-border payments and domestic lending is greatly curtailed. The CBR believes the sector is well capitalised enough to withstand rising default levels, but smaller banks could be at risk.

Impacts

• Limited credit availability will prolong the economic downturn.
• State-subsidised credit will offer some support to lending activity.
• State-owned banks will not pay dividends for 2021.