Russian businesses are struggling to pay back loans and are fighting to stave off bankruptcy.

20:58, Sun, Nov 23, 2025 Updated: 21:01, Sun, Nov 23, 2025

VLADIMIR PUTIN

Vladimir Putin is facing a major banking crisis (Image: Getty)

Russia's economy is facing a "time bomb", as sanctions escalate and interest rates remain high. Businesses around the country are struggling to pay back loans and are fighting to stave off bankruptcy.

Firms have watched on helplessly as interest rates were hiked to 21% towards the end of 2024, before being cut to 16.5% this November. The rate hikes were in response to spiralling inflation, as Russia's Central Bank struggled to contain a an increase in prices. Many experts predict inflation will grow again, forcing further interest rate rises next year.

Invalid email

We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy

RUSSIA

Elvira Nabiullina is the head of Russia's Central Bank (Image: Getty)

Companies are facing severe difficulties in paying back their loans, as sales and profits crash in a struggling economy.

Russia's Central Bank reported on Friday that the volume of problem loans - meaning debts that companies or individuals have failed to repay on time – has reached 10.4 trillion rubles (£100.7 billion).

Bank officials estimate the loan repayment issues amount to around 24% of the federal budget or twice that of Moscow's.

Russia's Credit Agency Expert RA said that as the end of September one in four companies were late in paying their loans. The share is the highest in six years of available statistics and data compiled by the agency.

A total of 165,000 legal entities were late in their repayment — 41,000 more than at the beginning of the year and 100,000 more than before the war.

Russian businesses are making less profits but at the same time are having to pay more in interest payments on their loans.

In 2024, companies paid 11.5 trillion rubles in interest to banks — 83% more than the previous year.

And in 2025, their interest expenses soared by another 54%, to 7.5 trillion rubles in the first six months of the year.

Senior Russian bankers told Bloomberg in the summer that they expect a full-blown banking crisis within the next 12 months.

The media outlet's sources emphasised that the situation in the banking system was becoming dangerous.