Small regional banks like UralFinPromBank find it harder to compete in mortgage lending and retail services, claims BrokerCreditService Company Ltd.

‘The latest regulations imposed by the Central Bank of Russia support the recent trend for bank consolidation. Small regional banks are finding it much harder to stay on the market. This is particularly true in terms of the banks that were originally created as part of a large financial/industrial group meant for servicing the enterprise only. They were never intended for mortgage lending or retail services, they had other things to do,’ Viktor Nemikhin, Director of BrokerCreditService Company Ltd., said to UrBC.

As regards the Ural market, SberInvestBank and UralFinPromBank are two such companies belonging to AVS Group and FinPromCo, respectively. Set up as ‘pocket banks’ for certain financial/industrial groups, they have been trying to act as independent players lately.

‘In order to develop further, the banks need some capital that can only be provided to them by their holding. If the groups are interested in these banks, they will have to invest a lot of money, in the opposite case, the banks are highly likely to be sold. The price is to be determined by the market and the current financial reports of the company,’ Mr. Nemikhin noted.

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