OREANDA-NEWS. March 15, 2010. In accordance with the latest figures published by the Central Bank, following the adoption of a law on minimum capital requirements 122 of the 145 banks whose own funds fell below the threshold were able to find additional capital by the end of 2009. The CBR expects that the emphasis in 2010 will shift to mergers and consolidation, in place of the state resources that were the main driver of last year’s capital growth across the banking sector.

2009 did indeed see many banks exhaust their own resources even as their capital bases came under noticeable pressure from crystallising credit risks. In our view, the key development vector in the banking sector over the period 2010-2011 will be efforts to overcome and “digest” accumulated risks while maintaining decent financial measures. Clearly, given currently modest interest on the part of private investors, the banking system will be forced to optimise the use of its existing resources through consolidation, mergers and take-overs. Furthermore, conditions are favourable in that take-over costs will be determined lss by a bank’s value than by the need to sustain its business.