Top 30 banks to occupy up to 90% of the market in 2019
The largest banks in terms of assets are gaining more and more influence, absorbing other credit institutions. Increased competition leads to that some banks prefer to renounce their license voluntarily. Beneficiaries of such actions are again the banks from the top 30.
According to a study of the banking sector prepared by Expert RA, about 50 more banks will leave the market in 2019. Some of them will voluntarily return a license to the regulator. And this trend, according to analysts of the agency, will continue. Last year, there was an increase in the share of state banks to a record figure — 72 per cent: state players are increasing it by absorbing banks of regional importance.
There will be 300-350 banks by 2021
Last year, 57 banks had their licence revoked for violations of the Federal law No. 115-FZ ''On counteraction to legalization (laundering) of incomes obtained in a criminal way, and terrorism financing'' and high-risk lending policy (for comparison, in 2017 the Central Bank revoked 47 licenses, and in 2016 — 93). Seven more banks renounced the license themselves last year. Thus, the total number of banks at the beginning of 2019 was 440. This can be explained by tougher competition in traditional segments — lending to the public and companies — at the same time with a high level of spending on doing business, says Mikhail Doronkin, the director for banking ratings at Expert RA.
The number of banks is forecasted to reduce by about 10% annually, as a result, by 2021 there will remain 300-350 credit institutions on the market, the interlocutor adds. According to analysts of the agency, in 2019 about 50 more banks will leave the market — then there will be less than 400 of them. The decrease will occur including at the expense of credit institutions that will hand over licenses voluntarily.
The clearance process will last about two years, suggests the head of the department of analysis of banks and money market at Veles Capital Investment Company Yury Kravchenko: ''The number of banks is already coming to a certain boundary mark, and unscrupulous banks are almost all gone. By this point, everything that could be eliminated will be eliminated.''
The problem is not in the reduction of the sector, but in the concentration in certain banks of businesses, says head of the department of stock markets and financial engineering at RANEPA Konstantin Korishchenko: ''If you look at the statistics, you will see that the share of capital and assets in the top five (which includes mainly state banks) — it is growing and is already 72 per cent. The question is not how many banks will remain in the 'back', but how the business will be distributed between the first five. If the main share will be in the first twenty, the question will be whether they will be 200 or 400 is absolutely not important.''
Large banks grow at the expense of the decreasing share of small ones
The largest number of acquisition transactions are now carried out by state banks. For example, in recent months VTB has acquired stakes in significant regional banks — Moscow Vozrozhdenie Bank (85%), Nizhny Novgorod Sarovbusinessbank (81,1%) and Tyumen Zapsibkombank (71,8%). The exception here is private Sovcombank, which in November joined RosEvroBank and SKIB Bank.
Within a year, there will be purchases from the largest state players, Kravchenko assumes. ''Perhaps these purchases will be at the regional level, that is, in those regions where there are large local banks that have real market business. It is quite possible that they will go to someone from the state players. The state will show the main activity to some extent — either state-owned banks or the Central Bank — in the form of consolidation of the banking sector,'' the interlocutor continues.
''Regardless of the regional affiliation, the process of consolidation of the banking business will continue, that is, banks with small capital in one form or another will join banks with large capital,'' adds Konstantin Korishchenko.
Expert RA is confident that in 2019 the consolidation of the sector on the largest players from the top 30 will continue, and their share will come close to 90%.
The consolidation of the sector has both positive and negative consequences for customers, Doronkin continues. ''On the one hand, the range of services that can be obtained within one bank, regardless of the size and specifics of the client's business, is expanding. On the other hand, companies from the regions fear that the absorption of local banks by federal players deprives them of individual approach and efficiency in decision-making. It is extremely important for small and medium-sized businesses to maintain a negotiating position, which is almost impossible in a large bank.''
''The clearance process is coming to an end in the Volga Federal District''
The largest number of credit institutions registered in the region in the Volga Federal District is in Tatarstan (16), it is followed by Samara Oblast (10), the third with seven banks in each are Saratov Oblast and Nizhny Novgorod Oblast. Least of all banks are in Penza Oblast and Ulyanovsk Oblast — one in each of them.
The number of banks in the Volga Federal District in 2018 decreased by four (from 71 to 67), according to the Central Bank. And this number will continue to decrease: last week the Bank of Russia revoked the license of Nizhny Novgorod Radiotekhbank. It was the last from the group of Tatfondbank that collapsed in 2016. Also in January, two banks outside of the Volga Federal District lost their licenses — Kamchatkomagroprombank and Eurocapital-Alliance.
In 2018, it was reported about the intention of Moscow Bank Zenit to complete in 2019 the accession of four subsidiary banks, including Devon Credit (Almetyevsk, Republic of Tatarstan) — in order to work under a single license. Thus, the number of local banks in Tatarstan will decrease.
''After leaving the banking market of Tatfondbank and related players, it seems to me, the main part of the clearance has been completed. If they touch small players, it is unlikely to affect the market. The revocation of the license of Radiotechbank will also have consequences, but, of course, not on such a scale. Here the process of clearance is coming to an end,'' Yury Kravchenko concluded.