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Top 1000 World Banks – Russia survives rouble depreciation to retain CEE lead

Russian banks have suffered through the stormy financial conditions of the past two years, but its lenders remain the largest in the central and eastern Europe region. However, Romania, and Banca Transilvania in particular, provide the region's good news story.
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The traditionally Russia-dominated central and eastern Europe (CEE) rankings have seen some changes in 2016. While capitalisation at many Russian banks fell – with the region's largest lender, Sberbank, losing more than $5bn – an additional two banks from the country have made it into the regional Top 25. Indeed, all Russian banks now included in the Top 1000 have sufficient Tier 1 capital to be among the Top 25 CEE banks, though the overall number of Russian banks in the global ranking fell from 19 to 11.

CEE

Russian banks were affected by rouble depreciation of 22.81% against the dollar, although some banks nevertheless improved their capital base, led by Credit Bank of Moscow (17.37%), B&N Bank (15.87%) and Otkritie FC (3.88%), all of which benefited from consolidation in the Russian banking system. This led to Credit Bank of Moscow rising five places to 14th in the CEE table, B&N entering the Top 25 and Otkritie FC climbing one place to seventh at the expense of Rosselkhozbank, which lost $1.05bn in capital. Ranks one to six remained unchanged.

The rising star in 2016’s CEE ranking is Banca Transilvania. The Romanian lender increased its capital base by 53.97% to $1.4bn and rose from 23rd in last year’s CEE ranking to 11th. The bank also tops the region’s profits ranking with 39.61% return on capital. This highlights a positive year for Romanian banks, which saw Tier 1 capital grow by 77.38%.

The biggest mover in CEE is Slovenia’s Abanka, which increased capitalisation by 66.05% after it merged with Banka Celje in 2015. It enters the Top 1000 and jumps straight into the CEE ranking in 25th place. Numbers 20 to 25 are all new entrants, with Slovenia’s Nova KBM benefiting from an overall fall in capital in the CEE region despite its $48m reduction in Tier 1 compared with the 2015 ranking.

One major loser is State Savings Bank of Ukraine, which dropped out of the Top 1000 completely, from 17th in CEE last year, as a result of a difficult business environment paired with a fall of the Ukranian hryvnia by 34.29% and a drop in Tier 1 capital from $1.22bn to $289m.

Central Asian banks have been moved from CEE to Asia-Pacific in 2016’s listings, causing 2015’s ninth ranked Kazak Halyk Bank to drop out of the Top 25 CEE banks, alongside Kazkommertsbank (from 11th) and ForteBank (from 21st). A devaluation of the Kazakh tenge by 46.37% would have left Halyk Bank in 10th place were it still included in CEE, Kazkommertsbank at 18, while ForteBank would drop out of the Top 25.

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