Why have half a million Russians gone bankrupt amid Ukraine war?
Summary
Last year, about half a million Russians declared bankruptcy as the country’s banks face growing risks linked to the war in Ukraine. Russian banks have issued more risky loans, partly to support the war and borrowers, but this has increased financial problems and the chance of more defaults.Key Facts
- Russia’s Ministry of Economic Development lowered its growth forecast for 2026 from 1.3% to 0.4% due to war impacts.
- Over 500,000 Russians declared bankruptcy last year, a rise of nearly one-third from the previous year.
- Russian banks issued more risky loans recently, including to individuals and companies linked to defense.
- About 10% of corporate loans in Russia are considered doubtful or at risk of default.
- Many Russians took three or more loans simultaneously, encouraged by state-backed credit programs.
- Overdue corporate loans amount to roughly 7 trillion roubles ($91 billion), about 3% of Russia’s GDP.
- The state is expected to support banks by keeping interest payments current on defense-related loans.
- New sanctions planned by the EU may further strain Russian banks and their financial situation.
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