Bank ranking by Russian Accounting Standards, 2008

Another year of growth: formal results of the Russian banks operations in 2008 present no room for fear or even serious alarm. Consolidated assets went up by 39% (in 2007 - by 44%), same as bank assets to GDP (62 to 67%), and own capital (increase by 43% comparing with 58% in 2007). The figures look impressive - "bad assets" in bank balance sheets amounted to mere 1.5%.

Time to take your money: bank credit portfolio slowed down its development from 55% in 2007 to 35% last year. Some other indicators prove the situation to be far from optimistic. Nominal growth rates should be adjusted in relation to inflation (13.6%). In the last quarter of 2008 enterprises cut their resources in the banking system by 4%, individual deposits went up by mere 0.2%. In 2008 licenses were revoked from 33 banks, 21 credit organizations were sanitized. Presently about 12% of banking sector liabilities are formed by CB credits - quite unprecedentedly for the domestic banking system.

Run of distrustful: the key crisis manifestation for banks to deal with in autumn of 2008 was mass withdrawal of individual bank deposits. In September individual deposits decreased by 1.5%, in October - 6%, in November - 0.2%. Almost all sanitized banks lost 25 to 50% of their private deposits within six months, which was significant part of their funds. The panic was caused by devaluation and inflation expectations and recollections of the events in 1998 and 2004.

Operation "sanitation": the crisis gave encouragement to mergers and acquisitions in the banking sector, with involvement of Deposit Insurance Agency. Top twenty banks grew much stronger due to sanitation measures and purchase of "problem" credit organizations, supported by both the state and Russian private capital (Alfa-Bank, Promsviazbank, NOMOS-Bank). Medium-sized banks (21-50 by asset size) were hit by the crisis most: private withdrawals averaged 13.9% and turned banks in the groups into "problem" ones (Sviaz-Bank, KIT-FINANCE, VEFK, Globex, SOYUZ).

Growth slowing down: in 2009 asset increment in the banking system would approximate 20-25% (Expert RA). State investments, programs to subsidize interest rates and private shareholders funds in credit organizations' capital would constitute main sources to finance the increment. Wave of private shareholders' additional emissions may be observed even now - to make up for possible losses due to poor credit portfolio quality. In 2009 corporate crediting - being less risky and more attractive for banks - would become a chief growth driver instead of private one.