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Top 50 Russian Banks

The "confidence crisis" of the summer of 2004 is fading gradually, having left just a few victims behind. The majority of bankers believe that there was no real reason for panic. Taking into account a 7-percent GDP growth, in terms of economic development, Russia looks as promising as never before, while the overall government debt is still at a relatively low level.

However, a majority of Russian depositors are still unable to forget the banking crisis in 1998, when millions of dollars in individual savings "evaporated" overnight. This was the reason for them to begin actively withdrawing money from their accounts this summer. Some analysts estimate that the private banking sector lost $2bn last month.

The crisis started when the Central Bank's inspectors revoked the license of Sodbusinessbank, following accusations of money laundering against the bank's management. After that, rumors emerged about the Central Bank making a "black list" of financial institutions to be closed shortly. Despite the fact that neither of the government officials has ever confirmed the existence of such a list, the Central Bank's management was then making every effort to refute this information.

In Russia, where 1,300 banks have assets totaling just $30bn, most financial institutions perform a minimal volume of transactions. Even low compulsory requirements (the minimum authorized capital is EUR1bn, or $1.2bn) cannot help here. The lack of public confidence is also due to the policy of informational non-transparency, which many banks are still pursuing. Regulatory agencies are still unwilling to change this situation.

This is basically the reason why the closing of Sodbusinessbank provoked a crisis. As Russian banks were afraid of lending money to each other, the management of many banks discovered that it was impossible to obtain financial resources from the interbank market.

Public concerns continued to mount, when another bank, Credittrust, declared itself bankrupt on June 8, when rumors about the bank being managed by the same people who owned Sodbusinessbank started to circulate on the market.

However, the crisis delivered the heaviest blow to Guta Bank. Given $206m in individual deposits and an active advertising campaign all over the Russian capital, Guta Bank was a financial institution whose name was known to the average citizen. Following the closing of the bank, rumors emerged about the investigation of financial misdeeds that allegedly took place in banking operations by the Guta Group. Finally, Guta Bank was sold to state-owned Vneshtorgbank.

Yet, it was too late to calm the depositors down. They emptied their accounts over several days and deprived the banks of hundreds of millions of dollars. This situation was quite difficult for Alfa Bank, which is Russia's fourth largest bank in terms of amount of assets. The bank's management accused its competitors of spreading hostile rumors, and many experts reckon that these accusations are not groundless. Depositors withdrew $240m from the bank, making up about 20 percent of all private deposits at Alfa Bank, over just three days.

The bank was backed by its major shareholders, Mikhail Fridman and Pyotr Aven, who invested $200m of their personal funds in the bank and also facilitated the obtainment of a loan of $500m. Alfa Bank managed to survive the crisis.

In the meantime, the Central Bank of Russia decreased the compulsory reserve requirements from 7 percent to 3.5 percent to help the distressed banks to accumulate more assets accessible to depositors. The State Duma swiftly adopted a new law, envisaging the provision of temporary government guarantees for all individual deposits not exceeding RUR100,000 ($3,430). This decision has stabilized the situation on the market.

In any event, damage to the public's confidence cannot be prevented at the present stage. Instead of supporting the growth of solid private banks, like Alfa Bank, Russians may be diverted to state-owned Sberbank, thus further enhancing the government monopoly in this sector. Foreign banks can directly benefit from the situation that has emerged, although few of them are represented in Russia.

 № BankNet assets*, $mLiquid assets*, $mCapital resourses*, $mBalance profit*, $m
1SBERBANK50 138,01 073,15 771,6957,8
2VNESHTORGBANK10 684,5177,21 901,8134,5
3GAZPROMBANK8 452,5387,21 046,2234,9
4ALFA-BANK6 348,9849,1877,68,1
5ROSBANK3 964,2411,5444,220,8
6MDM-BANK3 772,6589,1427,235,9
7BANK OF MOSCOW3 391,9365,3423,954,1
9INTERNATIONAL MOSCOW BANK2 702,2116,4256,146,4
10RAIFFEISENBANK AUSTRIA2 417,9125,8207,330,4
12CITIBANK2 228,682,6305,616,5
13URALSIB2 142,9215,0364,825,3
14PROMSVYAZBANK1 424,8154,8153,312,8
15NIK OIL1 408,5160,1248,826,0
16PETROKOMMERZ1 388,9114,9229,617,9
17NOMOS-BANK1 370,767,3175,06,0
18GUTA-BANK1 221,4121,5157,88,2
19GLOBEX1 174,073,4368,125,4
20ZENIT BANK1 170,579,7158,616,0
21AVTOBANK-NIK OIL1 164,079,3231,410,0
22VOSROZHDENIYE1 024,995,1112,08,1
24EUROFINANCE MOSNARBANK946,050,4192,315,2
25MENATEP SPB942,9233,5120,73,8
26AK BARS931,8103,6124,38,4
32RUSSIAN STANDARD815,9195,6178,378,3
33COMMERZBANK EURASIA814,28,950,912,9
34NATIONAL RESERVE BANK797,455,2205,323,7
35BANK OF KHANTY-MANSIYSK723,4186,4108,47,2
37BANK ABN AMRO665,041,178,76,6
38ING BANK EURASIA650,924,7101,9n/a
40BALTIC BANK595,338,658,07,0
41MOSCOW INDUSTRIAL BANK588,237,673,32,7
42FIRST CZECH-RUSSIAN BANK575,639,2147,55,7
43CREDIT AGROPROMBANK567,1181,260,810,1
45SUDOSTROITELNY BANK508,829,995,67,7

* - all data - 1H 2003


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