Russian banks saw their 2011 profits surge 70 percent on the previous year to a record 848 billion rubles ($27 billion), Central Bank Deputy Chairman Alexei Simanovsky said on Thursday.

Central bank officials predicted in mid-2011, using data from the first four months of the year, that domestic banks’ profits could reach 900 billion rubles but later downgraded their forecast to 800 billion rubles.

In 2010, Russian banks earned over 500 billion rubles in profits, exceeding the previous record of 2007 as the domestic economy recovered from the global financial and economic meltdown of 2008-2009.

Russia’s central bank does not expect record high profits from domestic banks in 2012. Signs of recession in Europe, coupled with the eurozone sovereign debt crisis and slower U.S. economic growth have made foreign borrowing less affordable, forcing banks to increase deposit rates to lure domestic investors and fight the liquidity crunch.

Russian banks’ profits may fall to 600-700 billion rubles in 2012, said Mikhail Sukhov, director of the Central Bank department for credit institutions’ licensing and financial recovery.

RIA Novosti