Widespread Corporate Losses Reported Across Russia
Russian companies have reported substantial financial losses totaling £68 billion in the first nine months of 2025, according to data from the state statistics agency Rosstat. This figure, equivalent to 6.52 trillion rubles, marks a significant increase in financial distress across the Russian Federation. Approximately 18,400 firms posted losses during this period, an 11% rise compared to the previous year. Overall, nearly one in three of Russia's largest companies operated at a loss in the first half of 2025, reaching a 30.4% share of unprofitable firms, the highest since the 2020 pandemic period.
Property Development Sector Faces Bankruptcy Risk
The real estate sector is particularly vulnerable, with nearly 20% of Russian property developers at risk of bankruptcy. This precarious situation is primarily attributed to plunging sales and persistently high mortgage interest rates. Deputy Prime Minister Marat Khusnullin, who oversees housing and infrastructure, warned that this percentage could exceed 30% if financial conditions do not improve within the next six months. Sales of new-build homes experienced a 26% year-on-year decline between January and June 2025, further exacerbating developers' challenges. The end of state-subsidized mortgage programs has meant that conventional housing loans have 'almost ceased to exist as a class,' with 80% of new mortgages now issued under targeted government schemes.
Economic Factors Contributing to Decline
Analysts point to a confluence of factors contributing to the widespread corporate losses. These include:
- Western sanctions and their ongoing impact on various industries.
- Inflation, partly driven by increased military spending.
- Increased corporate taxes.
- Steep central bank interest rates, which reached a 20-year high of 21% in October 2024 before being reduced to 16% by late 2025.
- Problems with overdue payments from counterparties, affecting nearly 40% of companies by the third quarter of 2025.
- Weakened business investment and rising corporate loan delinquencies.
Beyond the property sector, several other industries have been significantly impacted, with a majority of companies reporting losses. These include coal mining (68.1% loss-making), electricity, gas and steam supply (54.7%), water and waste services (52.9%), logging (45%), oil extraction (48.1%), finance and insurance (44%), and research and development (41.8%). Major companies like Gazprom Neft saw a 42% drop in Q1 net profit, while Gazprom itself reported a net loss of 170.3 billion rubles over nine months.
Government Considers Intervention
In response to the escalating crisis, Russian authorities are reportedly considering various measures to mitigate the impact, particularly within the struggling real estate sector. These potential interventions include a moratorium on developer bankruptcies, external restructuring, and the creation of temporary state funds to ensure the completion of troubled projects.
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