UrBC, Moscow, February 10, 2020. Finance analysts believe the number of banks operating on the Russian market will keep diminishing, even though the process will slow down against last year. The weaker market players will be leaving mostly due to performing questionable transactions (50% of banks that lost their licenses in 2019 did so for this exact reason).

According to Kommersant, rating agencies claim the Central Bank will now be revoking the licenses of banks outside of the national top hundred list.

Based on the CBR’s data, there were 396 banks with valid licenses operating in Russia as of February 1, down more than 50% on April 2013, when Elvira Nabiullina was appointed Head of the CBR. In 2019, 38 players left the banking market, including 24 banks whose licenses got annulled (the rest either renounced their licenses themselves or went through M&A with other market players). Four banks have lost their licenses since the start of the year so far, and two mergers have taken place as well.

‘This market will keep shrinking, as the banks will keep losing their licenses due to non-compliance with anti-money laundering regulations and insufficient market capitalization,’ says Finance Group Director at Fitch Ratings Anton Lopatin.