Russia ranks third in terms of number of banks in the world, behind the United States with 7,475 banks and Germany with 2,400.
Photo: Nikolay Cyiganov
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Russia Has More Banks than the Whole Europe
1,200 banks are currently operating on the Russian market. 1,350 banks are registered, which is more than in all Eastern and Western European countries taken together. Russia has the third-largest number of banks in the world, behind the United States with 7,475 banks and the running up Germany with 2,400, according to the Center for Economic Research.
No other country in the world has more than 1,000 banks. Combined assets of Russia’s banking system came to 44 percent of the national GDP at the end of 2005, says the Center for Macroeconomic Analysis and Short-Term Forecasting. This share is growing and expected to reach 49 percent by the end of the year, the Center predicts. However, it is not quite as much as in Eastern Europe where banking assets reach 60-100 percent of the GDP or the UK with 300 percent.
“One of third of Russian banks was created in 1990 in division of small Soviet banks,” Oleg Solntsev, an expert at the Center for Macroeconomic Analysis and Short-Term Forecasting, says. In most cases, the banks were set up because of conflicts of interests between regional and federal (the Union’s) authorities. Russia saw the second wave of bank creation between 1992 and 1994 when large enterprises and organizations established their own small banks.
The number of banks has been decreasing lately as the market is getting consolidated. Five Russia’s largest banks account 64 of all assets, 30 percent of which are at Sberbank, according the Center for Economic Research.
Analysts say that there are clearly more banks in Russia than the country really needs. Experts at the Center for Economic Research have made a calculation based on such factors as the country’s territory, GDP per capita, inflation and others and have come to a conclusion Russia needs some 180-220 banks.
There are so many banks in Russia because they are not transparent, which hampers mergers and acquisition on the market, experts note.
www.kommersant.com
All the Article in Russian as of Sep. 28, 2006
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