Actuality February 21, 2008

   For the year, from January 1, 2007 to January 1, 2008, the stake of nonresidents in the authorized capitals of banks

grew from 15,9% to 25,08%, is said in the Central Bank (CB) information. But the net stake of foreigners is less: if to subtract the off-shore stake of Russian citizens, comes out 22,8% (a year ago – 14,8%).

   In 2007 nonresidents' investment into the authorized capitals of the Russian banks broke all records on the absolute volume.

As of January 1, 2008 they totaled RUR 183,5 bln ($7,32 bln) – 203,9% by January 1, 2007.

In percents the record was in 2005 – 210,4%, but then nonresidents invested only RUR 26 bln, and in 2007 – RUR 93,5 bln.

    Amount of banks with participation nonresidents also grew record – by 49 up to 202.

With 100% participation – by 12 up to 62.

The nonresidents established six banks from scratch ("Toyota Bank", Bank of Cyprus, "Mercedes Benz Bank Rus", "ABM Bank", Commercial and industrial bank of China, "Uri Bank"), six more received by means of 100% stocks transfer in their benefit ("Third Rome", "TKS Bank", Promsvyazbank, Sovcombank, StarBank, "Absolut Bank"). The number of banks where nonresidents control more than 50%, but less than 100%, grew by 10 up to 23.

   "The bank association is disturbed with the vigorous growth of nonresidents' stake. But the CB representatives imply that they can control this process- in fact, licensing of new banks and permission for acquisition are in their hands", says Vladimir Mekhryakov, the vice-president of

the Khanty-Mansiysk bank.

"I know two cases for the last year, when CB did not consent to the sale of our banks to the foreign ones", says Pavel Medvedev, the deputy of the State Duma committee for financial market.

   "Law about banks and bank activity allows the CB to impose restriction for

the stake of foreigners in the banking system.

But for 12 years of action of this statutory wording there almost haven't been attempts to use it", Medvedev asserts. "If Russia enters WTO, it will not need these limitations – the attained agreement about the 50% quota for nonresidents will operate, and after a while the limitations will come to nothing", he reminds.

   However, Medvedev does not imagine expansion of foreigners, close to 100%. "There are so specific terms of life of banks in regions that foreigners will not master them soon". "There are not so many banks that are clear to foreigners and they are ready to acquire – only 20-30, therefore foreigners will scarcely receive the 50% control over our banking system", said the first deputy chairman of CB Aleksey Ulyukaev in the interview on February, 2007.