Management of consolidation of credit institutions in an innovative economy

In the article, the authors investigated the processes of consolidation of credit institutions, which contributes to the implementation of modern market strategies for entering new markets. Many large national and international banks have emerged from numerous mergers and acquisitions with competing lending institutions. Today, the banking sector of the Russian Federation is faced with the need for a large-scale process of consolidation, consolidation of existing banks and the creation of bank holdings, which is one of the ways to address the issues of insufficient capitalization and other problems limiting the development of the banking services market. The trend towards consolidation of the banking sector was formed for a number of reasons: the financial crisis, uncertainty in the economy, Western sanctions, and tightening of the regulator’s policy. The system of mechanisms of the Central Bank of the Russian Federation and the difficult macroeconomic situation in the country lead to a deterioration in the general position of regional banks. Under the existing conditions, some banks have to either close in order not to violate the requirements of the Central Bank of the Russian Federation, or to enter into merger deals with larger ones. One of the key tasks of enhancing the stability of the banking sector in the Russian Federation is to increase the capitalization of banks, improve the quality of the capital base and ensure an adequate level of capital coverage of risks assumed by banks. The object of the research is the banking activity of a commercial bank. The subject of the research is financial and economic relations arising in the process of financial management. The purpose of the study is to assess the potential insolvency of a commercial bank. In the course of the study, we used the materials of the financial statements of the Russian commercial bank PJSC Kurskprombank, LLC Expobank and the statistical statements of the Central Bank of the Russian Federation. The main findings can be used to improve the efficiency of M&A transactions in the Russian banking sector.