Russia’s largest bank delivers pessimistic 2026 forecast

Russia’s largest bank, Sber, is bracing for a challenging 2026, CEO German Gref has told shareholders. He cited high interest rates as a key factor behind a sharp drop in loan demand, warning that tough conditions are likely to persist.

The lender has been navigating a volatile economic environment since sweeping Western sanctions were imposed on Russia over the Ukraine conflict. These measures, targeting critical sectors including finance, prompted the Bank of Russia to raise its key rate, which is currently at 20%.

Speaking at the bank’s annual meeting on Monday, Gref said the current financial climate – marked by elevated borrowing costs and reduced access to credit – has created significant headwinds. “Very high interest rates and sharply reduced demand for money and credit” have weighed heavily on business activity, he said.

Gref acknowledged that 2025 has already proven difficult, but voiced confidence in the bank’s resilience. “It is part of Sber’s identity to strive for results no matter how tough the times are,” he said. Still, he warned that 2026 “promises to be no easier,” citing continued uncertainty around geopolitics, GDP growth, and monetary policy.

In response to sanctions imposed on Russia over the Ukraine conflict in February 2022, the Russian central bank raised its key rate from 9.5% to 20% to stabilize the ruble and contain inflation. As conditions improved, the rate was cut to 7.5% by September 2022. However, renewed inflationary pressure led to a tightening cycle in mid-2023, with the rate peaking at 21% by October 2024. Earlier this month, the central bank cut it to 20% – the first reduction since 2022.

Despite sanctions and inflationary pressure, Russia’s economy has shown signs of recovery. After contracting 1.2% in 2022, GDP grew 3.6% in 2023 and 4.1% in 2024. Growth is projected to slow to 1–2% in 2025 and up to 1.5% in 2026.

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