Russia economy meltdown as bank profits plummet and lenders hit by bad loans

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1. Russian banks have come under increased scrutiny over their bad loans as top executives may be forced to beg for state bailouts.

   Elvira Nabiullina, head of the central bank, faces pressure from executives to lower rates amid challenges for corporate clients and households. She cut the benchmark rate in June from a record 21% to 20%, and again last month to 18%.

   The central bank also indicated it would continue to cut interest rates throughout the year to reach its target of a 4% inflation rate by 2026.

   Despite this, current rates still make it harder for people to secure, repay, and refinance their debt. Expert RA, Russia’s largest credit rating agency, reported a 65% drop in net profit last year and called for external support.

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