19 January 2012, Thursday, 15:42

Russian banks head on to merger

author: Alfia Sharafutdinova

The state corporation “The Deposit Insurance Agency” reports about the first in 2012 reduction of the number of the banks, working on the territory of Russia. At present time the deposit insurance system includes 897 participants, including 796 acting banks, having the license for working with natural persons, 10 banks, which already lost the license for working with natural persons, and 91 banks, found on the stage of liquidation.

It is necessary to mention that 910 banks were the participants of the deposit insurance system in January 2011. The reduction of the number of the participants is connected with the total reduction of the number of banks in Russia: the statistics of the agency can be taken as the basic one, since more than 90% of the Russian banks are the participants of the deposit insurance system. At that the reduction of the number of the banks in Russia occurs mainly due to the merging and take-over processes.

“One should understand that in the overwhelming majority of cases liquidation doesn’t mean that this or that bank was closed because it failed to fulfill some obligations before its clients. The majority of the banks are liquidated because they are swallowed by bigger banks” – the deputy chairman of the Russian Young Businessmen Association in Bashkortostan, regional attorney of the National Association of Credit Brokers and Financial Consultants in RB Renat Khilajev said to “Bashinform” – “Therefore we can observe two main tendencies now: the first one is enlargement of banks through the merger of smaller ones and the second one is reorganization in the bank market. In our opinion both processes will favorably affect the bank clients – both natural and corporate ones, since through enlargement, merger and reorganization we will finally get more stable and transparent bank market as a whole”.

“Activation of merging and take-over processes is explained first of all by the demand of the main regulator concerning the increase of the bank capitals. Many participants of the bank market simply doesn’t want to invest additional money in order to stay in this rather complicated and risky business further” – the head of the Credit Organizations Association’s press-service RB Dmitry Rudzit mentioned.

themes: banks, insurance