Only for the Brave
Private banks are smart, nimble, well managed; state-owned banks are slow, cumbersome and find it hard to make money. That conventional wisdom is being overturned in Russia, in the short term at least. After years of private banks making the running, public-sector institutions have made a strong comeback, putting on assets at a fast clip. State-owned Vneshtorgbank increased its asset base by over 50% last year, for example. And Sberbank, the public-sector savings monolith, continues to soak up almost two-thirds of Russian deposits.
That’s partly a reaction to last year’s run on private-sector banks, of course. As confidence seeps back into the private sector, the competitive situation may change. Most analysts argue, however, that as in other sectors of Russian economic life, the government is now attempting to build up national champions as a counterweight to
the private sector.
| Stars of the New Russia |
| It’s no secret that the business climate in Russia has gotten a lot chillier in the past year. The recent decree that only companies with 51% or more of Russian ownership can bid for new hydrocarbon blocks is just the latest sign of a return to a more statist approach sweeping the Kremlin. But for those prepared to navigate those stormy waters, the rewards can be rich indeed. Natural resources are the most visible force powering Russia’s surging GDP growth; a fast-growing middle class is sparking a consumer boom, too. In this year’s Stars of the New Russia Awards, Global Finance magazine honors those banks and companies that are proving most adept at riding this wave. |
