OREANDA-NEWS. October 11, 2007. International Industrial Bank have become more transparent over the past year.

The country's leading banks have become more transparent over the past year, but progress has been uneven, according to a Standard & Poor's report released Wednesday.

The average level of transparency rose by 4.4 percent to 52 percent, from 48 percent last year, but the average remains significantly below international standards.

"There is a general trend toward transparency," said Oleg Shvyrkov, an author of the report, the agency's third annual look at Russian banks' transparency and disclosure.

However, "This positive trend is inconsistent across the individual banks," the report says.

Of the country's big two state-controlled banks, which both held share sales this year, VTB "markedly improved" in transparency, jumping from sixth place last year to second this year, but Sberbank dropped 11 places, from fifth to 16th.

What makes VTB a standout is that it improved its transparency after its IPO in May, as many banks "do not maintain the same high standards of disclosure once they complete the placement," S&P said in the report.

Banks whose transparency fell after holding share sales include Sberbank, BIN Bank, Rosbank, Moscow Bank for Reconstruction and Development and Bank Petrocommerce, which all scored lower this year.
 
But some underperforming banks improved on last year, resulting in an overall increase in the index. Altogether, 22 banks scored above 50 percent, four more than last year. Seventeen banks moved up, while 10 moved down, and the gap between the highest scorers and the lowest narrowed from 57 percent to 42 percent.

International Industrial Bank made the greatest gain, leaping 45 percent to 15th place.

Bank Rossia, headed by Putin ally Yury Kovalchuk, made the list for the first time this year, at No. 30.

The largest drop recorded was 21 percent by Petrocommerce, which failed to publish its international financial reporting standards results by the Aug. 10 report deadline, although it did publish them later.

In a question-and-answer session after the report was presented, representatives of some of the banks criticized in the report questioned the validity and criteria by which they were judged.

But "for every representative outraged by the criteria, there was another shaking their head in disagreement," said Ian Gleeson, the head of the British Embassy's economic section. "We had a full room today. This shows that the banks understand the importance of the ratings."