Savings Crimea – Newspaper Kommersant No. 9 (7454) dated 19.01.2023

Almost a year after the call of the President of the Russian Federation to go to the Crimea, the leader of the country’s banking sector, Sberbank, nevertheless decided to do so. According to market participants and experts, first of all, it will compete with local banks for new infrastructure projects, although it will not ignore the retail segment. However, the development of a full-fledged branch network will require multibillion-dollar investments, it will be necessary to build a business from scratch, which will turn out to be a completely new and unfamiliar task for Sberbank, and the Crimean market is largely saturated.

On January 18, Sberbank, the largest participant in the banking market of the Russian Federation, officially announced the start of work in the Crimea. As the bank explained, a team has already been formed, the first ATMs have been installed, and a network of self-service devices will be launched within a year. Offices will be opened during the year, the first of them in the largest cities will start working in the first half of the year. During this time, the bank expects to deploy “all necessary services and services.” Sberbank refused to answer additional questions from Kommersant. Plans for a possible further exit to the DPR, LPR, Zaporozhye and Kherson regions were also left without comment in the bank.

Sberbank will become the second systemically important bank (after PSB) to enter the peninsula. This happened almost a year after the outbreak of hostilities in Ukraine and President Vladimir Putin’s appeal to businesses and banks to work in Crimea, as “now there are all conditions”, especially for those who “before feared sanctions measures” (see “Kommersant” dated March 18, 2022). However, the bankers were in no hurry to respond to the call, although almost all state-owned banks quickly fell under harsh sanctions.

Only the PSB entered Crimea in April 2022. VTB still does not plan to provide services on the peninsula under its own brand, but intends to work “based on the largest bank in the region – RNCB” (it will be merged with VTB in 2023). Novikombank only clarified that they would work there in the region, “if there is a need to service the enterprises of the state corporation Rostec in Crimea.” Other banks from the SDN list did not answer “Kommersant”.

PSB Chairman Petr Fradkov in December 2022, in an interview with Russia 24 TV channel, called Crimea “a huge interesting potential market in terms of banking support.” By that time, the bank had doubled the volume of borrowings from citizens, and the issuance of mortgages on the peninsula increased by more than 2.5 times. PSB expects to attract RUB 225 billion to the region by the end of 2024. credit and investment resources. The bank clarified to Kommersant that they now offer the entire range of products in the region – from settlement and cash services to lending and acquiring, increase lending to all major sectors of the Crimean economy – “construction of residential and commercial real estate, industry, transport, tourism, agro-industrial complex , winemaking, small and medium-sized businesses and others.

As one of the managers of the SDN bank notes, in terms of gaining market share, Sberbank will have to solve a problem that has never faced it before – to build a network from scratch.

This will be helped by the strength of the brand, in the negative – the lack of experience in developing the client base and the lack of basic infrastructure. Opening one or two branches for Sberbank is not a problem, it is more difficult to deploy a network comparable to other regions, the banker believes.

Sberbank’s spending in Crimea will depend on the scale of its plans. One average bank branch, excluding cash desks and ATMs, with an area of ​​100 sq. m for rent can cost a modest version of several million rubles of investment, notes one of the bankers. A cash-in ATM can now cost $60,000-70,000, another market participant specified. But in order for the banks coming to Crimea to be able to fully compete, it will be necessary to duplicate the infrastructure of those who have been working in the region for a long time, and this is “billions of rubles of investment,” says another Kommersant interlocutor in one of the SDN banks.

However, according to an SDN bank employee, the lending market in Crimea is close to saturation, and local players are already “satisfying the existing demand.” In the future, he believes, an increase in lending is possible by 20–30%, but existing banks can cope with this, while “a multiple increase in lending will lead to accumulation of risks and withdraw income from businesses and the population.” In the corporate segment, most likely, competition between banks will unfold for new investment projects, he believes. It is on them that budget money is actively distributed.

At the same time, the Crimean economy “occupies a very small share in the country, which greatly limits the potential for the development of the banking sector here,” says Anatoly Perfilyev, junior director for banking ratings at Expert RA. “Banks may be interested in the retail segment,” he believes, but the population of the region has a “relatively low level of well-being,” which will affect the average bill of banking products.

Olga Sherunkova