The banking ‘turbulence’ that occurred in the summer of 2004, in which 10 banks either had their licences revoked or were forced into ‘arranged marriages’ with other banks, now appears as just a minor blip following prompt action by the government, the central bank and banks themselves, and the Russian banking system has enjoyed the benefits of a buoyant economy. Driven by high oil, gas and metal exports, real GDP grew 6.8% in 2004 and is forecast to grow by around 5% in 2005. For our Top 50 Russian banks, aggregate pre-tax profit grew 37.2% to $4186m, aggregate assets increased 42.5% to $182.4bn and aggregate Tier 1 capital rose 22.7% to $21.5bn.
Our listing, and the banking system in general, continues to be dominated by the Russian state-owned banks, with Sberbank, Vneshtorgbank, Gazprombank, Bank of Moscow and Vnesheconombank accounting for 59.5% of the total assets of our Top 50, 49.4% of the aggregate Tier 1 capital, and claiming 48% of the aggregate pre-tax profits. In the banking system as a whole, the government directly controls through these and others (for example, Rosselkhozbank, Russian Bank for Development etc) more than 50% of the total assets. This in itself indicates the relative size of about 1100 banks that fall outside our Top 50.