MOSCOW, Dec 7 Reuters Russian banks39; profits will reach record levels around 3.3 trillion roubles 36 billion this year, the central bank said on Thursday, before dropping off by about 1 trillion roubles in 2024 as high interest rates cool lending growth.

Profits slumped by almost 90 in 2022 as the West imposed sweeping sanctions on Russia39;s financial sector over Moscow39;s actions in Ukraine, but banks have recovered this year through strong lending growth and high net interest margins, particularly thanks to the state39;s burgeoning defence budget.

Lending accelerated in all segments in the third quarter, however a slowdown is possible at the end of the year, the central bank said.

Corporate lending growth of 5.9 year on year in the quarter was driven by demand for loans from state contracts, the replacement of external debt and growth in housing construction, the bank said.

The bank39;s 750 basis points of monetary tightening since July is expected to reduce demand for credit in the economy.

Widening interest margins, in spite of higher rates, have boosted profits, the bank said. It forecast banks39; 2024 profits at 2.12.6 trillion roubles.

We are assessing 2024 as a little more challenging because the central bank39;s policy is aimed at fighting inflation and the rate is therefore very high, and the central bank has taken measures to restrict lending, said German Gref, CEO of dominant lender Sberbank, in an interview broadcast on state television on…