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.
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 |