Page 95 - RusRPTJan21

8.0​ Financial & capital markets 8.1​ Bank sector overview
According to Elvira Nabiullina, Governor of the Central Bank of Russia, the significant cleansing of the banking sector of unhealthy players has been completed​.
As a result of the determined policy that began in 2013, the number of banks shrank by more than half during 2014–2019. The majority of the reasons have been the revocation of the license as a result of a breach of either solvency or money laundering regulations. Bank mergers have so far been quite rare. At the beginning of December, 371 banks and 40 other credit institutions operated in Russia.
This year, 33 smaller banks have lost their licenses, two of them last week. Loan restructuring and government interest rate subsidies have eased the situation in the banking sector this year, but the economic downturn may cause difficulties, especially for very small financial institutions. According to the October ​forecast​ by Talouslehti Expert RA , 35 small banks may be in trouble next year.
Despite the large number of banks, the industry has always been very concentrated. Sber, the country’s largest bank, accounts for nearly a third of both balance sheet and deposits. The twelve largest banks have been identified as systemically important, accounting for about 75% of the balance sheet of the entire banking sector. The other 100 largest banks account for about 20 percent of the balance sheet. The remaining about 250 banks are very small and together account for only about 5 percent of the sector’s balance sheet. About half of the smallest banks operate the so-called. basic license, ie they cannot offer their customers all banking and financial services.
Half of the systemically important banks are owned by the state or state-owned companies. The role of the state in the banking sector increased especially in 2017–2019, when several small and medium-sized banks fell into the hands of the central bank, the Deposit Guarantee Agency or a state-owned company. At present, the balance sheets of banks directly or indirectly controlled by the state account for about 65% of the sector's balance sheet. The central bank has an effort to sell the stolen Otkritie and ATB banks to private investors, but there are very few notable buyer candidates.
Time for fee income to step up. Analysts see 2021 as the year for players
95 ​RUSSIA Country Report​ January 2021 ​ ​www.intellinews.com