Mergers and acquisitions are widely believed to be the principal ways for banks to grow stronger. As for Russia, for instance, M&A used to happen if an acquired bank failed or its owners no longer wished to be in the business. Nowadays, however, mergers and acquisitions are more far-sighted.

The Russian banking community experienced its first M&A in 2004, and a great increase in the number of mergers and acquisitions followed in 2006. The market players are inclined to think that SibAcademBank’s merger with Uralvneshtorgbank that resulted in the emergence of URSA Bank (one of Russia’s Top 20 largest banks in terms of assets and equity capital at the moment) was one of last year’s most prominent success stories.

'On a larger scale, this merger was probably the greatest and the most successful M&A in the entire history of banking business in Russia,’ says Kirill Shmalev, an independent financial expert.

'Companies that go through with the M&A normally have a consolidated strategy that is difficult to follow alone, and they have a very clear-cut idea as to how profitable the M&A is likely to be for them,’ says Vilora Avilova.

'This means that we can now speak of a synergizing effect that results from mergers and acquisitions, that is, it becomes possible for a business to reach the goals that were theretofore unachievable,’ she added.