|
|
Russia Commercial Banking Report Q3 2007Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2007 Product Code: R302-2447 Description Key IssuesThis quarter we have updated a lot of the numeric information in the banking reports. We now have final banking statistics, sourced from the central bank/regulator or trade association, in relation to the end of 2006 for all countries except Iran. All of the commercial banking reports need to be considered in the context of a global environment that was benign for banks in the vast majority of the 59 countries for which we have collected data. In 2006 the median local currency growth in total assets was 17.2% in Croatia. The median local currency growth in total loans was 18.2% in Bangladesh. The median local currency growth in total deposits was 16.9% in Algeria. In almost all countries local currencies were stable or rising relative to the US dollar. Except in Venezuela and Iran, figures were not distorted by double-digit inflation. Loan/deposit, loan/asset and loan/GDP ratios all provide a rough measure of the development of the banking systems. Across the 59 countries for which we have collected data, the median loan/deposit ratio is 85.1% in Thailand. The median loan/asset ratio is 54.8% in Romania. The median loan/GDP ratio is 53.4% in Kuwait. Across the eurozone, by comparison, the equivalent numbers are 126.4%, 50.6% and 119.3%. All three ratios are rising in most of the countries for which we have collected data. The most important issue for Russia is that economic growth continues to be strong, led by manufacturing and construction in the first quarter 2007. We have revised upward our real GDP growth forecasts and are now calling for 2007 growth to come in at 7.3%, up from 6.5%. Our long-term projections have also moved. An increase in investment spending is anticipated. However, there are serious concerns about how effective this will prove due to the short-term danger that capacity constraints will feed through to inflation. Even more fundamental, many large enterprises may be tacitly forced by the state to pursue social goals rather than profit maximisation, negatively impacting on investment returns. Future economic and industry prospects should continue to improve and, so long as oil prices remain high, risks are limited. However, the institutions of state and the government’s role in the economy mean that, should oil prices fall, the constraints on non-oil sector development may rise rapidly. Russia’s growth in bank deposits continued to be strong, up by 41.7% in local currency terms to the end December 2007. This is the fastest growth rate in the region and the second-fastest rate among the 59 countries surveyed by BMI. Bank loans grew at an even faster rate of 47.2% in local currency terms. However the level of per-capita deposits remains among the lowest in Central and Eastern Europe (CEE) at US$1,948. Not one of the country’s private-sector banks would rank as even a medium-sized institution in most developed countries. Given that the large demographics and size of Russia make it difficult for small operators to operate successfully, it is somewhat doubtful at this stage whether a substantial retail customer base will develop for the sector. It is not certain that all of the 42 or so foreign banks that have set up operations in Russia will feel the need to remain there over the long term. Some foreign banks may expand their business in the country by buying the operations of other foreign banks. A potential privatisation of Sberbank - or introduction of changes so that it operates more like a regular commercial bank than a collector of deposits - is a potential wildcard over the long term. However, the circumstances that have led to the (part) privatisation of the massive Chinese stateowned banks do not apply in Russia. In part because of the dominance of Sberbank, Russian banks derive a surprisingly high percentage of their funding from deposits. Table of Contents
|
|
||||||||
MindBranch has been the leading provider of industry and investment research from more than 550 independent research firms since 1992. With over 90,000 market research reports, MindBranch is your trusted source of competitive business intelligence. |