CB expects 10 banks to be merged, two foreign auto concerns to enter market
SOCHI. Sept 4 (Interfax) - The Central Bank of Russia expects ten banks to be merged with others this year and two foreign automobile concerns to enter the market.
"The number of mergers could exceed those that have already taken place by the end of the year. We know of seven banks that intend to combine with ten banks by the end of the year," Mikhail Sukhov, director of the CB's Department for Licensing and Financial Recovery, said at a banking forum in Sochi.
This indicates that the banking sector could be poised to liven up, Sukhov said.
In addition, he said "three foreign automobile makers have already formed [subsidiary banks in Russia] and these could be joined by another two by the end of the year."
Sukhov cited changes in how banks developed their branch networks as an example of stabilization in the sector. For example, total branches have been reduced at a slower rate than operations in the sector.
"Over the half year, the network of domestic branches decreased by only 1.4%"," he said, adding that the occasion accusation that the CB is reducing total bank servicing points in unfounded. According to Sukhov, over the half-year, of Russia's top-30 banks, 15 reduced their networks, eight maintained the same number of points and seven banks increased total outlets.
"Banks are keeping their points of presence, however they are using them as a way to adjust expenses. This is extremely important for future development of retail," Sukhov said.