Russian corporate insolvencies jumped 10.8% year-on-year between January and June 2026, as high interest rates, economic depression, and escalating tax burdens triggered a wave of business failures across multiple sectors, according to data from Fedresurs cited by Kommersant.
Corporate Bankruptcies Surge Amid High Interest Rates and Tax Pressure
Russian courts declared 3,550 legal entities insolvent during the first half of 2026. External monitoring procedures—the initial phase of bankruptcy proceedings—began for 2,970 companies, marking a 20.9% annual increase, according to Fedresurs statistics reported by Kommersant. Both bankruptcies and monitoring procedures accelerated notably during the second quarter.
Geographically, Moscow led the figures with 859 cases, followed by the Moscow region with 260 cases and Saint Petersburg with 232 cases. Kuban and Sverdlovsk regions each recorded approximately 120 corporate insolvencies.
Creditor-filed bankruptcy notices increased by 18.5% year-on-year in the first half of the year. Meanwhile, filings initiated by debtor companies themselves surged 43% compared to the same period in 2025 and 83% compared to 2024, according to Fedresurs data.
Sectors Affected and the Domino Effect on Business Costs
Insolvencies and pre-bankruptcy procedures impacted IT firms, retail businesses, infrastructure providers, and enterprises manufacturing products for the military-industrial complex. Анастасия Шамшина, lawyer and founder of K’AMELAWT, noted that inflation, the key interest rate, and rising borrowing costs have slowly caused a domino effect, according to Kommersant.
Did you know? Rosstat reported that overdue business debts to counterparties, banks, and the budget reached 7 trillion rubles by the end of April, growing 20% over the year and exceeding federal economic support spending by 1.5 times.
Businesses face shrinking consumer demand alongside mounting tax obligations. Following last year’s corporate profit tax hike, the government raised the value-added tax (VAT) to 22% this year and launched a tax reform for small businesses, removing hundreds of thousands of entrepreneurs from the simplified tax system and low rates.
Debt Servicing Outpaces Corporate Profits Across Major Industries
Companies are forced to spend an average of over 37% of their pre-tax profits just to cover bank loan interest, according to an assessment by the Center for Macroeconomic Analysis and Short-Term Forecasting, a government-aligned think tank cited by Kommersant. In major industrial sectors, interest payments vastly outstrip earnings:
- Rail transport, shipbuilding, and aircraft manufacturing: Interest payments exceed profits by eight times.
- Wood processing, construction, and commercial services: Payments outpace profits four to six times.
- Chemical and automotive industries: Payments exceed earnings by more than three times.
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Retail trade: Payments surpass profits by 2.3 times.
The Central Bank reported that bad loans on bank balance sheets exceeded 11 trillion rubles, while potentially problematic loans held by large companies reached 36 trillion rubles. A European intelligence service warned in July that this trajectory threatens Russia with an explosive banking crisis, according to Kommersant.
Personal Bankruptcies and Changing Court Approaches
Personal insolvencies also edged upward. Courts recognized the bankruptcy of 140,000 citizens and individual entrepreneurs in the second quarter of 2026, a 0.9% rise from the previous year, with a 6.8% increase across the first half of the year, Fedresurs figures show.
Economists noted that courts are less likely to recognize bankruptcy with the write-off of all debts.
Frequently Asked Questions
Why are Russian corporate bankruptcies increasing in 2026?
Bankruptcies are driven by economic depression, a record-high Central Bank interest rate, rising borrowing costs, higher VAT, and a corporate tax reform that increased financial pressure on businesses, according to Fedresurs data reported by Kommersant.
Which sectors are hit hardest by the wave of insolvencies?
Insolvencies and pre-bankruptcy filings have affected IT companies, retail, infrastructure providers, and military-industrial enterprises, with heavy industrial sectors spending multiples of their profits solely on interest payments.
How much is the total overdue business debt in Russia?
Rosstat reported that overdue debts owed by Russian businesses to counterparties, banks, and the state budget reached 7 trillion rubles by the end of April.