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Bank Industry Risk Analysis: Russian Federation (The) Jul 06
Standard & Poors, July 2006
Abstract
Current supportive macroeconomic environment for banking sector development Good growth potential Adequate asset performance, but sensitive to shocks Growing liquidity, but dependent on sustained customer confidence and export inflows Banks' widening business diversification, especially into retail banking Increasingly sophisticated and higher quality management, namely in risk control Banks' focus gradually shifting to real banking business from opportunistic and 'pocket-bank'-type development Weak regulatory framework and supervision, along with limited political commitment to banking reform Russia's concentrated economy Dominance by Sberbank, high fragmentation and competition, somewhat mitigated by large untapped demand for banking services in Russia Risks related to nontransparent and concentrated ownership Substantial concentrations in lending, funding, and revenues Vulnerable profitability due to concentrations and dependence on trading gains Banks' capitalizations...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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