The Russian banking system has witnessed a surge in monthly profits in June after the figures plummeted in May due to Covid-19 related restrictions.

Bank of Russia, the central bank of the country, noted that profits recovered to RUB70bn ($975m) in June from RUB500m in May.

However, the level is significantly low compared to last year’s average monthly profit of RUB140bn, reported Reuters.

In the report, the central bank also added that bank retail deposits increased 1.9% last month mitigating the impact of outflows.

In the first six months, the deposits increased by 1.2%.

The central bank also noted in a review that long-term deposits dropped while short-term deposits gained momentum supporting the overall growth.

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Local management consultancy firm Frank RG CEO Yuri Gribanov was quoted by the news agency as saying: “We find ourselves in a state of crisis, and this has to affect the deposit base.

“The state of market stagnation could last from six months to a year.”

Sberbank chief analyst Mikhail Matovnikov told Reuters that the Covid-19 pandemic has changed customer behaviour. The rate of opening new accounts has fallen, while consumption decreased prompting an increase in savings.

In May, Bank of Russia revoked the banking licence of Morgan Stanley Bank, a credit institution based in Moscow. The decision was taken after the bank decided to participate in voluntary liquidation.