In 2023, the number of Russian banks under the control of non-residents decreased by more than 12%

In 2023, the number of Russian banks under the control of non-residents decreased by more than 12%, to 57 credit institutions, according to Central Bank data analyzed by Kommersant. Until now we are talking about foreigners leaving small banks. It is still unprofitable for large players to leave the country, experts say, although credit institutions abroad are under ever-increasing pressure.

As follows from the Central Bank data, which Kommersant studied, the number of credit institutions in Russia that are under the direct or indirect control of non-residents, who can control 50% or more of the votes, decreased by 8 in 2023, to 57 banks. This number includes banks in which, even if formally they belong to Russian owners, the final beneficiary is a foreign person. The regulator does not provide monthly statistics, but in the first half of the year the number of such credit institutions decreased by 5, in the second – by 3. In 2022, the number of banks controlled by foreigners decreased by only 3.

Separately, the Central Bank’s statistical bulletin publishes information on the number of banks in which foreigners have any share greater than zero (not necessarily a controlling one). Their number decreased by slightly more than 11%, to 96 credit institutions. This figure includes data on banks controlled by non-residents.

Currently, foreign banks are still going through the procedure of approving the sale not only with the Central Bank, but also with a subcommittee under the Ministry of Finance, in addition, 45 banks require permission from the President of the Russian Federation. In 2023, presidential approval was received for transactions with shares and interests in seven banks. Of these, Ozon Bank and Ecom Bank were merged and changed owners: Money Mail Ru, Ikano Bank, Mercedes-Benz Bank Rus, J&T Bank and Intesa.

However, not all deals announced in 2023 have completed. Thus, in the case of Intesa, due to “bureaucratic steps,” the deal has not yet been closed, and “it is not easy to complete the sale,” Carlo Messina, the head of the Italian group, told Bloomberg Television in February. Already in 2024, the President of the Russian Federation authorized transactions with shares of Yandex Bank and HSBC Bank.

Yulia Temkina, head of Kept’s practice for working with financial organizations, believes that “foreign banks make decisions about leaving Russia depending on their current situation and not everyone is willing to sell the business.”

In this regard, the expert divides credit organizations into several categories: “The first is small banks whose activities in Russia were limited. It is easier and more painless for such organizations to leave than to continue doing business in the country. The banks that were part of the group that left the Russian market also left.” For example, according to her, this is RN-Bank (now Auto Finance Bank), Ikano-Bank.

Another category is “large banks for which income from Russian business is significant, so many do not plan to sell and make efforts to preserve it.” There are also foreign banks whose sale was planned before February 2022: “Such transactions could have been postponed and are only being closed now.”

The pressure on foreign beneficiaries of Russian banks abroad is constantly growing. Thus, last week the United States threatened Raiffeisen Bank with sanctions for doing business in Russia, EUobserver wrote, citing a message from the country’s Ministry of Finance. However, the process of leaving Russia not only involves special procedures and financial losses, but can also be very long in time. Each transaction on the financial market is “considered literally individually,” emphasizes Natalya Kuznetsova, partner and head of corporate practice at O2 Consulting.

And even with approval, the expert clarifies, “the exit of foreign players from the Russian market is associated with large financial losses.” Discounts on sales are determined both by the political situation itself and by the conditions of the Russian authorities: transfer to the federal budget of at least 15% of the cost and a discount of at least 50% to the market price.

Olga Sherunkova