Capital Crunch Looms for Russian Banks

Russian banks face significant challenges in sourcing new capital due to increased oversight by the central bank. VTB CEO Andrei Kostin highlighted the need for 1.7 trillion roubles in compliance with regulatory requirements amid a shallow Russian equity market devoid of Western funds.

Russian banks are bracing for a major challenge in 2026 as they seek new streams of capital amid increased oversight from the central bank, according to VTB's CEO Andrei Kostin.

Kostin revealed to Reuters that upcoming regulations focus on fortifying the calculation of capital for non-core assets, making capital acquisition a daunting task.

To adhere to the central bank's stringent requirements, VTB will require approximately 1.7 trillion roubles over the next five years, a feat complicated by the absence of Western funds in Russia's shallow equity market.

(With inputs from agencies.)