Central Bank Says Profits of Russian Banks to Be Lower Than $15 Bln in 2015

MOSCOW, January 28 (Sputnik) – Russian banking system will earn less than $15 billion in profits in 2015, the Central Bank’s first deputy said Wednesday.

“Life is showing that there won’t be 1 trillion [rubles in profit] … there will be considerably less than a trillion, but there will probably be hundreds of millions,” Alexei Simanovsky told journalists in Russia’s upper house of parliament, the Federal Council.

He added ir was difficult to forecast exact profits because of the different ways the financial situation in the country might develop.

The Russian banking system has taken a big hit with the depreciation of the ruble, which has lost about a half of its value against the dollar since mid-2014 due to the sharp decline in global oil prices. In addition, several major Russian banks are subject to sanctions by the West over the situation in Ukraine, prohibiting them from obtaining long-term credit on Western financial markets.

To limit currency depreciation and inflation risks, the Russian Central Bank hiked key interest rates to 17 percent from 10.5 percent in mid-December, which also had a negative impact on the national banking system's profitability.

Following the steep rate hike, Russian Economic Development Minister Alexei Ulyukayev vowed that the government would support the country's banking system during difficult times.