Hundreds of Russian banks are poised to disappear as the worsening economic crisis and a central bank cleanup force them to merge or close.High interest rates and sanctions over the conflict with Ukraine are squeezing the country’s more than 820 lenders just as central bank Governor Elvira Nabiullina is shutting mismanaged and under-capitalized banks at a record pace.
"Russia has far too many licensed banks," said Christopher Weafer, a senior partner at Moscow-based consulting firm Macro Advisory. "Cutting the number to between 200 and 300 would be a very positive step."
Sweeping away weak banks would help the economy by improving lending practices, reducing corruption and increasing transparency, said Weafer. It could also fortify the dominance of the largest state-owned firms, OAO Sberbank and VTB Group, as customers seeking safety migrate to those institutions. Meantime, some mid-sized lenders say they’re ready to take over competitors in what could prompt a wave of deals.