Foreign banks in Russia are generating higher returns on assets (ROA) than their Russian counterparts, despite the dominance of large Russian state-owned and closely held banks in the sector. Less than a quarter of the Russian banks in The Banker Database are foreign owned, accounting for less than 12% of total assets. But half the top 10 banks by ROA are foreign owned, including the top two performers in the country, GE Money Bank Russia and Home Credit and Finance Bank.
The story is even more striking at the bottom of the spectrum, with only one foreign-owned bank – the Russian subsidiary of Kazakhstan’s Kazkommertsbank – among the 10 worst losses on assets for 2011. On aggregate, foreign subsidiaries in Russia generated ROA of 2.6%, compared with 2.2% for Russian domestic players. The four large state-owned banks that control almost 62% of total assets are not necessarily benefiting from their dominant market position. Only Sberbank, with ROA of 3.65%, is among the 10 most profitable locally owned banks, and just outside the top 10 when the foreign banks are included.
