The Russian Federation's biggest banks
The landscape of the Russian banking sector has changed greatly over the past two decades. Numerous credit institutions were established during the early 1990s only to find themselves bankrupt several years later. The main reasons for this wave of bankruptcies (in addition to the ongoing economic crisis) were inadequate preparation for the new economic environment, clumsy interference by the government and the absence of sound banking regulations during the transition to the market economy. These factors led to many banks going bankrupt and their clients losing their savings.
The situation in the Russian banking sector changed at the beginning of the 2000s, reshaping the sector and bringing stabilisation. According to the Central Bank of Russia, the number of credit institutions shrank from 1686 in January 1998 to 1314 in January 2001. By April 2013, the number of operating credit institutions had decreased further, to 955: 895 commercial banks and 60 other non-banking credit institutions. The main reasons for these liquidations were licence cancellation, bankruptcy or corporate reorganisation.
The evolution of the Russian banking sector has served to consolidate banking assets in the hands of the big credit institutions through mergers and acquisitions and to stabilise the banking sector, thus regaining some public trust after the wave of bankruptcies during the 1990s. Below you will find details of the three current biggest banks in Russia in terms of their total assets in 2016.
Russia's largest banks: top three
Sberbank
Sberbank has been the largest bank in Russia in terms of total assets since 2014. It is a state-owned credit institution — the Central Bank of Russia owns 50% of its authorised capital plus one voting share. The rest of the shares are owned by several domestic and foreign investors. It is estimated that over 43% of the bank's authorised capital is owned by foreigners. Interestingly, the Central Bank of Russia is not allowed to sell its shares without a prior change in Russian law. Sberbank's shares have been publicly traded in Russia since 1996 and are available to trade over the counter in the US and on the Frankfurt Stock Exchange. Although Sberbank has experienced a 14% fall in Tier 1 capital and a 32% fall in profits, it is still twice the size of its closest rival. Founded in 1841, Sberbank is currently headquartered in Moscow and employs over 250,000 people. It has more than 137 million retail clients and over 1.1 million corporate clients in the 22 countries in which it operates.
VTB Bank
VTB Bank is the second-biggest bank in Russia in terms of total assets and is largely owned by the government — 60% of its authorised capital is held by the state. VTB Bank's shares are publicly traded in Russia and on the London Stock Exchange and are among the most liquid equities in Russia. VTB Bank and its subsidiaries form a leading Russian financial group — the VTB Group. This Moscow-based bank was founded in St Petersburg in 1990 and currently employs over 91,000 people. It generated 415 billion RUB in revenue and 51.6 billion RUB in net income in 2016.
Gazprombank
Gazprombank is in third place among Russia's largest banks. Founded in 1990, the bank's largest shareholder is Gazprom — a company dedicated to the extraction, production, transportation and sale of natural gas, which in turn is owned by the government of Russia. The bank's business areas include retail, corporate and investment banking, FOREX, securities and precious metals operations and depository, clearing and settlement services. Gazprombank owns an extensive branch and outlet network across Russia. While Banker magazine declared Gazprombank its bank of the year in 2001 and 2005, the US Department of the Treasury imposed sanctions on it in 2014. In 2016, Gazprombank went into losses, experiencing a dramatic 987% drop in profits.