“The big hole in VTB’s balance sheet is, I think, the number one troubling factor in the Russian banking sector right now.”

The more important story than even the direct material damage is the way the damage is dragging down VTB’s business, which is the real big beast. VTB is a big, important creditor and player. Nobody else compares to VTB in terms of aggressively financing a lot of adventuristic industrial and infrastructure projects in Putin’s new wartime economy.

I can believe that this is a problem for VTB, I don't really understand how VTB getting into trouble is a particularly serious problem for the Russian economy in aggregate, though.

If I understand the article aright, VTB's idea was that it would use Wildberries to get the lion's share of the banking market. If Wildberries is literally going up in flames, that plan has fallen through. Okay. So...VTB doesn't get that market share. Sucks to be VTB, no doubt, but VTB's loss is the gain of other Russian banks whose marketshare they wanted to horn in on.

If the Russian government wants to bail out some portion of the banking sector, it can do that. I wouldn't expect that the Russian government would care much which bank is doing badly and what bank isn't. Who has more marketshare is just shuffling lines around on a board that the government controls.