The trends of mergers and acquisitions in the Russian banking system

Financial University under the Government of Russian Federation, Moscow

Scientific supervisor:

THE TRENDS OF MERGERS AND ACQUISITIONS IN THE RUSSIAN BANKING SYSTEM

Sometimes there is a complete borrowing client base of the Bank purchased by the parent. This means its almost complete disappearance from the acquired credit institution. At the same time navigates to the customer is the most valuable and capable of generating income assets bought by the Bank, reallocation of qualified personnel. Since the financial funds are not allocated for the modernization of any business acquired by the Bank, nor on the promotion of its brand, the Bank-the purpose becomes defunct credit institution, except that the existing license of the CBR. [2]

The most striking example of a Bank, implementing such a strategy is MDM-Bank. In a short time he was able to significantly increase their assets due to the transfer of the client base of absorbed medium and large by Russian standards of banks.

The specifics of the Russian banking mergers and acquisitions is the fact that most of them are horizontal. Moreover, in practice, the Russian mergers and acquisitions of credit institutions, you can highlight only a few of mergers, such as the Association of Evrofinance and Mosnarbank, as well as IMB and Bank Austria Creditanstalt Russia (BACAR). All other transactions were in the nature of absorption. Sometimes deals are made and conglomerate type, when there is a Union commercial banks from investment institutions and insurance companies.

In 2015 the rate on the Russian market of banking mergers and acquisitions has decreased. Banks, previously manifested the greatest activity in the consolidation of the assets and the extension of their groups, focused on solving problems of existing facilities.

Thus, further development of the Russian banking sector to improve its competitiveness and efficiency in the context of globalization in the international arena is directly associated with the processes of mergers and acquisitions as a tool that promotes a sustainable and highly capitalized banking system. The consolidation of the banking sector needs to occur in terms of creating a transparent and stable economic environment in which banks would be beneficial to combine assets and in the face of increasing competition in the banking market.