Rosstat reports that the net profits of large and medium-sized firms (excluding the financial sector) dropped last year in both nominal terms and relative to company turnover. The net profits, nevertheless, were still quite good, equal to over 8 % of turnover and 11 % of GDP.
Profits over the past couple of years have allowed firms to increase their out-of-pocket investments. As total fixed investments contracted until last year, the share of fixed investments financed from other sources has shrunk, including domestic bank loans that already earlier had a small share.
The balance of financing between firms and domestic banks has also shifted. Although the flow of funds from firms to banks has decreased over the past couple of years, borrowing by firms from banks has declined to such an extent that the net flow of funds, unlike in previous years, has been going from firms to banks. Partly this situation is also due to drops in the net outflow of funds from firms to outside Russia.
Net flow of funds from firms to banks and abroad