“Izvestiya” has analyzed how and why reduced the presence of foreigners in the Russian banking system
Last week Citibank announced the closure of two offices in St. Petersburg. The Bank explained that they regularly close the offices, which are becoming less popular. The plans for the streamlining of the branch network at the end of the year 2015 – first quarter 2016 voiced by other foreign banks, including Nordea Bank, Raiffeisen Bank, Bank of Cyprus. UniCredit Bank has reduced the network in 2014. “news” decided to analyze how reduced the presence of foreign banks in the Russian Federation since 2014, since the escalation of the crisis.
According to the Central Bank, as of 1 January 2014 there were 251 Bank with participation of foreign entities on January 1, 2015 them there are already 225, and on January 1, 2016 — only 199. The share of “foreigners” in the aggregate Charter capital of Russian banking system decreased from 26.4% on January 1, 2014 to 16.9% on January 1, 2016.
Users Facebook message after Citibank had posted pictures of his private offices in the social network with the assumptions: “Citibank closes almost all the departments. Something’s happening…”; “…strategically reduce their business in the Russian Federation”.
Citibank explained the reduction in branches other factors.
— We cannot comment on the strategies of other foreign banks working in Russia, — said the managing Director of Citibank Natalia Nikolaeva. — As for Citi, Russia was and remains an important business for Citi. We are actively working on the translation of the traditional outlets that used to see in the new format of interactive high-tech offices (smart branches). Our customers are increasingly mobile and actively use our services on the Internet without visiting the office.
According to the Chairman of the Board of Nordea Bank Mikhail Polyakov, indeed shows a decrease of the presence of foreign players in the Russian market.
— Statistics not cheating — indicates Mikhail Polyakov. — Overall market picture is not uniform — someone as opportunities develop the business, reduce the presence of, especially in that segment, which had been particularly attractive, is in retail. With regard to Nordea Bank, we are currently working exclusively with a segment of the largest and most reliable corporate clients, the Bank does not require network. As part of this strategy, the Bank in 2015, reduced network, and got out of retail.
Other foreign banks have not responded to the request. Experts interviewed by “Izvestia”, the claim that the Exodus of foreigners from Russia is clearly observed trend.
— The share of non-residents in the aggregate authorized capital of the banking system (excluding the participation of non-residents under significant influence of Russian residents) on 1 January 2014 was 23%, on 1 January 2015 — 18,4%, as of January 1, 2016 — 14,3%, — says head of the analytical Department of the Bank BKF Maxim Osadchy.
Foreign banks began to reduce its presence in Russia in the crisis of 2008-2010. In July 2010, Morgan Stanley sold City mortgage Bank, Bank “East Express train”. In December 2010, the Spanish banking group Banco Santander has sold JSC “Santander consumer Bank” plus Bank “Orient Express”. But at the moment shareholders “East Express” actively looking for a buyer for this asset. In February 2011 the Dutch Rabobank Rabobank returned to the Central Bank of its license, which was revoked. In October 2011, the British group Barclays sold Barclays Bank known banker Igor Kim. In 2012, the Belgian group KBC Group to sell Absolut Bank non-state pension Fund Russian Railways “Welfare”. In March 2014, in Moskomprivatbank Ukrainian oligarch Igor Kolomoisky was introduced temporary administration, and then the Bank was sold to the Bank.
— At the same time foreigners and do not rush to the Russian market, — said Maxim Osadchy. — Chineselegolas is a subsidiary Bank of the Agricultural Bank of China — was registered on 25 September 2014. After that was not registered none of the banks belonging to non-residents. Foreigners gradually get rid of their Russian subsidiaries. Do not contribute to the enthusiasm of foreigners, the current economic crisis and sanctions.
According to the Deputy Director of the center for macroeconomic forecasting and investment strategy of the Bank Natalia Shilova, the Exodus of foreign banks from Russia fit into the global trend and additionally heated the preservation of the sanctions regime.
Deutsche Bank announced in 2015 on the reduction of 9 thousand workplaces and cessation of business in 10 countries, — says Natalia Shilova. — Nomura cuts the separate divisions in Europe and the USA. Barclays announced a reduction of 1.2 thousand jobs and the closure of a part of functionality in Russia, Brazil and Asia. HSBC from 2015 to 2017 plans to reduce from 22 thousand to 25 thousand jobs worldwide. Russia with the falling economy and in conditions of low oil prices often fall in the number of regions that are not too attracted foreign investors. In addition, the influence sometimes have political motives.
Managing Director of “Investkafe” Ivan second place: operations I am sure that the reduction of the presence of foreign banks in Russia is a consequence of deoffshorization.
— The Central Bank will still need to report on the ultimate owners, and from July 2015 need to disclose a controlled foreign company, — tells Ivan second place: operations.
According to senior analyst of National rating Agency of Irina Grigorieva, the sale of assets in Russia of foreign banks is associated with reduced profitability, which was influenced by the unfavourable macroeconomic situation, lower prices for export commodities, the reduction of the level of solvency of the population.
The Chairman of the Board SDM-Bank Maxim Solntsev hopes that in 2016 the trend will not continue.
— It is clear that because of the sanctions, many of the active position on the part of parent banks on the territory of the Russian Federation were suspended, — says Maxim Solntsev. — But still, the quality of assets of these credit institutions (with foreign participation) is better than the system average.
