People prepare a sled in the form of the Russian ruble during the Winter Sledge festival in St. Petersburg, on Feb. 1, 2015.
The total assets of Russia's banks contracted by 24 billion rubles ($380 million) in January as a crumbling ruble, high interest rates and an economic slowdown battered the country's banking industry, according to Central Bank data cited by Russian business newspaper Vedomosti on Friday.
The amount of assets held by the banking sector fell by 2.6 percent last month compared with December, the data showed, while corporate lending declined 0.5 percent and retail lending fell 1.3 percent.
The figures were not revalued to take account of changes in the value of the ruble.
The financial sector is in the grips of an emerging crisis after suffering badly from a weakening ruble, which lost over 40 percent of its value last year, and high interest rates imposed by a Central Bank seeking to tame inflation.
The ruble lost 22 percent against the U.S. dollar in January after falling 14 percent in December.
Experts predict that Russian banks are facing an emerging crisis that will see dozens of lenders forced to seek state support to avoid bankruptcy.
The percentage of non-performing corporate loans rose by 14.4 percent in January, while non-performing retail loans grew 6 percent, according to the Central Bank data cited by Vedomosti.
The Moscow Times: 15. February 2015
A photo shows a woman entering an office of Rosbank, French bank Societe Generale's Russian unit in Moscow.
Societe Generale intends to cut around 1,500 jobs in Russia this year as the country's faltering economy puts pressure on the French banking giant's finances, news agency Bloomberg reported late last week, citing a source close to the process.
Societe Generale, known chiefly through Russia under the name of its commercial bank, Rosbank, cut around the same number of employees last year, said the unidentified Bloomberg source.
The bank currently employs around 20,500 people, mainly at Rosbank, the source said. A bank representative declined to comment on the matter when questioned by Bloomberg.
Societe Generale's deputy CEO Severin Cabannes told Bloomberg on Thursday that the bank expected to see a rise in bad loans amid Russia's high inflation and poor economic outlook.
Russia's economy is expected to shrink by at least 3 percent this year, with inflation pushing past 15 percent year-on-year this January.
Societe General is Russia's 12th largest bank by assets according to industry website banki.ru. U.S.-owned Citibank and Austria's Raiffeisen also have major presences on the Russian market.
Raiffeisen, which has a strong presence in Eastern Europe, last week announced that it would limit exposure to Russia due to economic issues.
Private banks are expected to be hit hardest by Russia's economic contraction, as big state-run banks that dominate domestic lending receive government bailouts.
A 2.4 trillion ruble ($378 billion) anti-crisis spending plan announced in January provides 1 trillion rubles ($158 billion) to recapitalize banks.