The top order of banks in the central and eastern Europe (CEE) region changed little in 2007, but the striking story is the strength of the largest Russian banks.
The top two players, Sberbank and VTB, more than doubled their Tier 1 capital, pulling much further ahead of the CEE pack and also vaulting up the global rankings – Sberbank rose from 66 to 33, while VTB jumped from 116 up to 60. Sberbank’s assets grew by more than 40% to exceed $200bn, while those of VTB were up more than 75%, at $93bn.
Of course, the strength of oil and gas prices continues to drive the Russian economy, with gross domestic product growth hitting 8.1% in 2007, up from 6.7% in 2006. Even so, the performance of the banking sector is impressive in a year when the Central Bank of Russia was obliged to inject emergency liquidity in August 2007 to counter capital outflows that followed the freeze-up of global credit markets.
In practice, the total number of Russian banks in the Top 25 for the region remains unchanged at 18 but there has been significant movement further down the list. Russia’s Globexbank and Rossiyskiy Kredit Bank have been squeezed out of the Top 25 by new arrivals, along with the General Banking and Trust in Hungary, where economic growth is languishing.
The slower-growing economic context in Belarus has also resulted in Belagroprombank being pushed to the bottom of the 25, despite a 45% rise in Tier 1 capital.
Vnesheconombank, with an estimated $1.2bn of capital, has been removed from the Top 1000 listing after the introduction of a new legal framework in 2007 that confirms its status as a state-owned development bank, explicitly barred from competing with commercial banks.
Two key economic themes in Russia in the past year have been the rise of the regions, and the stellar growth of consumer credit – up by about 30% in 2007. These are reflected in the new entrants to the Top 25, including Ak-Bars Bank from the oil-rich region of Tatarstan, and the Russian arm of regional consumer finance specialist Home Credit and Finance Bank.
One bank from outside Russia did manage to climb into the Top 25. Ukraine’s Privatbank surged from 851 in the global rankings to 448, in another high-growth market that also yielded a new entrant to the Top 1000, Ukreximbank, entering the Top 1000 at 985.
