Leonov M.V. EMERGENCE AND ACTIVITY OF BANKING CONGLOMERATES IN RUSSIA

http://dx.doi.org/10.15688/jvolsu3.2014.2.7  

Leonov Mikhail Vitalyevich
Candidate of Economic Sciences, Researcher of School of Business and Economics, Humboldt University of Berlin
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Shpandauer St., 1, 10099 Berlin, Germany


Abstract. The study provides an empirical analysis of the emergence and activity of banking conglomerates in Russia. Banking conglomerate includes banks that are owned by the same group of holders. The existence of banking conglomerates may be explained by the possibility of credit risks diversification, higher controllability of business processes, as well as their specialization in prospective directions of banking. As of January 1, 2014, 44 conglomerates formed from 118 commercial banks were identified in Russia. Most conglomerates make part of investment and financial holdings, and their constituent banks develop both retail and corporate activities. These banks have higher profitability and operating efficiency compared to the banking sector as a whole. The author analyzes changes in indicators of market concentration, taking into account the existence of banking conglomerates. It is shown that, along with organizational and economic benefits to owners, a conglomeration of banks carries systemic
risks to financial system stability.

Key words: banking conglomerate, banking competition, bank strategy, specialization of bank, Russian banking system, prudential regulation, systemic risk.

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Emergence and Activity of Banking Conglomerates in Russia by Leonov M.V. is licensed under a Creative Commons Attribution 4.0 International License.

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