The Banker's latest CIS bank rankings identify that, although Ukraine and Kazakhstan banks are the most leveraged, they also have the largest capital base to withstand the turmoil. Writer Geraldine Lambe

The dramatic effect of the credit crisis on Commonwealth of Independent States (CIS) banks is clear to see in the news, if not immediately in The Banker's regional ranking. Of the top five banks, four of them, from Kazakhstan, have been part or fully nationalised, or have had to turn to the government for a liquidity injection.

Ukraine's banks have also been hit hard by the crisis. Repayment problems and deposit outflows have led to 13 Ukrainian banks being forced into temporary central bank administration and given protection from creditors.

In April, the government recapitalised six of them, three of which are in our top 25 CIS listing: Bank Nadra (17th in our ranking and now 92% government-owned); Bank Finance and Credit (the volume of recapitalisation has yet to be decided, is 22nd); and Ukrprombank (25th in our ranking and 99% government-owned).

Leading lights

Notwithstanding all of this turmoil, the two countries dominate the rankings, with 11 Ukrainian banks and eight Kazakh banks in the top 25. At first glance, this may make The Banker ranking seem out of synch with events, but this is not the case. Because our rankings are measured by Tier 1 capital, the fact that a bank has been part or fully nationalised does not necessarily mean it will slip down the ranking.

Equally, however, our rankings are still based on 2007 figures, because 2008 figures are not yet available. But they already make clear the extent of the expansion of Kazakh banks, which has left them exposed in the downturn. It will become clear, when the full year 2008 figures are released, whether or not the Kazakh banks will be able to retain their size.

With government intervention, many of the banks - in Kazakhstan and elsewhere - are better capitalised than they were before. The danger will come in the next 12 months as banks begin to be weighed down by non-performing loans at the same time as business slows.

This is also true for Azerbaijan's banks, five of which make the most profit on capital in the CIS region - led by International Bank of Azerbaijan (at 76.5%).

The country has enjoyed a growth rate of 25%, powered by the oil and gas boom, and rapidly rising living standards have helped to drive the mortgage market and other profitable business lines from a very low base. These kinds of profits will be more difficult to come by over the next few years.

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Total assets ($m) 2008; Top 100 total assets = $206bn

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Tier 1 capital($m) 1008; Total Tier 1 capital = $24.1bn

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Best Profit on Capital(%)

cp/49/Top100CISBanks1-33.jpg

Top100 CIS Banks 1-33

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Top100 CIS Banks 34-66

cp/49/Top100CISBanks67-100.jpg

Top100 CIS Banks 67-100

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