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Top 1000 World Banks - Russian banks' mixed fortunes influence CEE ranking

Russian banks dominate the central and eastern Europe rankings, taking the top places for Tier 1 capital, profitability and highest mover. However others experienced bailouts and nationalisations that pushed them down or out of the list, as Stefanie Linhardt reports.
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Mixed fortunes among Russian institutions have impacted the central and eastern Europe (CEE) regional ranking in 2018. Still, Tier 1 capital across the region’s top 25 banks rose by about $31.48bn to $145.88bn as all but two banks increased their capitalisation.

The odd ones out were Otkritie Financial Corporation Bank, a systemically important institution in Russia and the sixth largest bank by capitalisation in the 2017 CEE ranking, which was bailed out by the state and nationalised in August 2017; and B&M Bank (14th in the 2017 CEE ranking) was also nationalised, only a month after Otkritie. The two lenders’ capital plunged by about $2.41bn and $159m, respectively, seeing the institutions fall to 16th and 18th positions regionally. Otkritie’s new management is working on a merger between the two banks.

Promsvyazbank, which was 11th largest in the region by capitalisation in our previous ranking, was also bailed out in 2017 and has dropped out of the Top 1000 ranking altogether. 

At the other end of the spectrum, Russia’s largest lender, state-owned Sberbank, has further expanded its lead by increasing capitalisation by 29.7%, which saw it rise five positions globally. Indeed, the banks ranked one to five in the CEE ranking remain unchanged (all but one are Russian) and all institutions improved their capitalisation by more than 12%. And the highest mover in the region is also Russian: Tinkoff Bank more than doubled its Tier 1 capital from $457m to $969m, making it the 23rd largest bank in CEE.

Sovcombank has climbed eight places in the regional ranking, largely due to a change in the bank’s reporting criteria. The $636m of capital as of its full-year 2016 results were under Basel III, while in the 2017 financial report for this year’s ranking, Sovcombank only published Basel I financials (with $1.43bn of Tier 1 capital). During 2018, Sovcombank will merge with peer RosEvroBank (which has $589m in Tier 1 capital), which will see the banks combined in next year’s ranking.

Poland’s Bank Pekao is a new entrant into the regional CEE ranking. Previously majority owned by Italy’s UniCredit, the lender used to be classified as a foreign-owned subsidiary and was therefore excluded from the regional ranking. A change in ownership sees it enter the regional table for the first time at number six.

Hungarian banks had the highest return on capital (ROC) across all countries in CEE, driven by the country’s largest bank OTP, whose ROC was the third highest in the region. However, Russian banks Tinkoff and Sovcombank remain the most profitable, occupying the top of the regional profit ratio table for the second year in a row this year.

Top 25: Central and Eastern Europe ($M)

Regional  Rank World Rank Bank Country Tier 1 capital
1 31 Sberbank Russia 58,344
2 73 VTB Bank Russia 23,006
3 155 Gazprombank Russia 9,392
4 159 PKO Bank Polski Poland 9,289
5 211 Alfa Bank Russia 6,217
6 223 Bank Pekao Poland 5,532
7 231 Bank Gospodarstwa Krajowego Poland 5,421
8 280 OTP Bank Hungary 4,106
9 330 Russian Agricultural Bank Russia 3,236
10 349 Credit Bank of Moscow Russia 3,058
11 519 Alior Bank Poland 1,750
12 529 Banca Transilvania Romania 1,718
13 551 Nova Ljubljanska Banka (NLB) Slovenia 1,641
14 580 Belarusbank Belarus 1,486
15 597 Sovcombank Russia 1,427
16 619 Otkritie Financial Corporation Bank Russia 1,329
17 661 Getin Noble Bank Poland 1,206
18 669 B&N Bank Russia 1,179
19 678 Bank Saint Petersburg Russia 1,144
20 718 State Savings Bank of Ukraine Ukraine 1,019
21 732 Ak Bars Bank Russia 982
22 738 MONETA Money Bank Czech Republic 970
23 739 Tinkoff Bank Russia 969
24 832 J&T Banka Czech Republic 757
25 859 Belagroprombank Belarus 705

Highest Movers: CEE

Regional  Rank World Rank Bank Country Tier 1 capital % change Tier 1 capital $m
1 739 Tinkoff Bank Russia 112.17 969
2 718 State Savings Bank of Ukraine Ukraine 107.61 1,019
3 974 Zenit Banking Group Russia 90.75 502
4 231 Bank Gospodarstwa Krajowego Poland 87.82 5,421
5 349 Credit Bank of Moscow Russia 82.01 3,058
6 976 SMP Bank Russia 50.64 500
7 947 TBC Bank Georgia 41.22 555
8 732 Ak Bars Bank Russia 40.19 982
9 519 Alior Bank Poland 39.2 1,750
10 159 PKO Bank Polski Poland 36.96 9,289

Top Five ROC: CEE

Regional  Rank World Rank Bank Country Return on capital (%)
1 739 Tinkoff Bank Russia 44.77
2 597 Sovcombank Russia 44.61
3 280 OTP Bank Hungary 30.38
4 31 Sberbank Russia 28.07
5 947 TBC Bank Georgia 27.46

New Entrants: CEE ($M)

World Rank Bank Name Country Tier 1 Capital
976 SMP Bank Russia 500
989 Bank Ochrony Srodowiska Poland 488
996 MKB Hungary 479

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