No new banks in Russia during the last two years

Russia bankOver the past two years there were not established new banks on the market in Russia, although there are submitted and approved applications. The number of applications for registration of new credit institutions for this period significantly decreased, but they are little more than a dozen. About 30% of the applications were approved, but in the country were not opened new banks. Interest in this business declined because of profitability, as well as the fact that the country has enough credit companies.

The Russian Central Bank for the last 3 years has substantially healed banking sector. When the regulator in 2015 received nine applications for registration of credit institutions, and in 2016 – seven. Ten applications were refused. The main reasons for refusal were unsatisfactory financial position of the shareholders or inadequacy of the documentation with legal requirements.

By the Russian Central Bank clarified that in 2015, there were two new credit companies, and in 2016 – three. The experts believe that they are not banks, but clearing companies, credit cooperatives and others.

The fact that the number of banks decreased, while new not detected is explained by the experts with the low profitability of the business. Currently, the major transactions in the banking sector are mergers and acquisitions, which enlarges the credit institutions. On the market there are many proposals, including the sale of Bank for 300 million USD in one of the regions.

“You do not have to create a new bank, this just might be bought by the shareholders”, says professor Yuri Yudenkov the Faculty of Finance and Banking of the Russian Academy of National Economy and Public Administration.

In the process of rescuing the sector, the Russian Central Bank increased the requirements for minimum capital of banks from 180 million rubles to 300 million rubles in 2015 and expect new increase within the next two years. Alsop were increased the requirements to management with requirements for disclosure of information. The significant investments that banks will have to make in the coming years in information technology, and according to him, not all developers are willing to make such a foothold in competition with major market participants.

According to the official data in the beginning of 2016 in Russia are operating 575 banks. The first 200 hold 95% of the market of banking services. Despite the reduced number of banks the access to remote financial services increases in the regions and among the population. The availability of loans and other products rose, including price.