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Top 30 banks in Russia

2009-2014 retrospective: Before the storm?

A large majority of banks are now preparing their 2015 year-end financial statements in a macroeconomic environment still severely affected by the combination of strong volatility on the currency and energy markets and the ongoing impact of international sanctions. Yet, if these factors did clearly have a significant impact on the Russian economy, a closer observation of the financial dynamics since 2009 indicate that the Russian banking industry was already showing clear signs of deterioration long before 2014.

Engaged for years in a race for ever-higher lending volumes, the Top 30 banks selected in this publication demonstrated again a significant growth in size and profitability post 2008-2009 crisis. However, this population also observed a stronger market competition directly affecting their revenues as well as a deterioration of their credit portfolios, in particular on retail segments starting 2012.

While compensating declining margins by continuously increasing their loan production until last year, the banking industry entered into a new paradigm in 2015. With no immediate perspective of sufficient lending growth, capitalisation constraints and an expectation to see credit portfolios further deteriorate (both retail and corporate segments), some banks’ resistance might be seriously challenged in the coming years. How many of them will pass the test? The financial performances as of 31 December 2015 will probably give a first indication.

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