The number of banks on the Russian market is decreasing, with many private banks leaving or changing their status to become state ones, UniCredit Bank CEO Mikhail Alekseev said addressing the Financial Forum of Russia organized by the business newspaper Vedomosti.
“In the past five years, some 400 banks have abandoned the market, this is probably our new reality. The concentration in the banking sector is growing. Ten major banks account for 70% of the national banking system”, he said.
According to Alekseev, the share of state banks has increased from 59% to 69%, while the share of private banks is relentlessly declining. The entire banking sector, meanwhile, has grown 1.5-fold in the past five years.
“This is a positive tendency. Yet, the development of the banking sector is hindered by the enterprises gathering considerable finances as deposits. They do not invest this money”, Alekseev said.
He added that the banking sector’s credit portfolio has doubled in the past five years.
“However, the banking sector growth is not yet transforming into the economic growth”, Alekseev concluded.