Russia - U.S. Banks and Local Correspondent BanksRussia - US Banks
The Russian banking sector is dominated by large, state-owned banks, with the top five banks controlling over 50% of assets. At one time, there were over 3,000 small and regional banks, but economic pressures, regulatory actions, and insolvency have led to significant consolidation within the sector. State-owned banks have been the primary beneficiaries of the Russian government’s efforts to inject short- and long-term liquidity into the market to mitigate economic downturns in 2009 and 2013-2015. Russia’s largest domestic banks include Sberbank (controlled by the Central Bank); VTB Bank (state-owned, including subsidiaries VTB24, VTB Capital, and Bank of Moscow); Gazprombank (subsidiary of state-owned Gazprom); Rosselkhozbank (state-owned agricultural bank); and Alfa-Bank (Russia’s largest private commercial bank). All of the above state-owned banks (not including private Alfa-Bank) are included in the Office of Foreign Assets Control of the U.S. Department of Treasury’s Ukraine-related Sanctions List, which limits the types of transactions in which U.S. companies may enter with these banks. The sanctions significantly limited access of these organizations to the U.S. financial markets, as August 2017 legislation prohibits the conduct by
U.S. persons or persons within the U.S. of all transactions in, provision of financing for, and other dealings in new debt of longer than 14 days.
Russia’s largest private commercial banks, in addition to Alfa-Bank, include Russian Standard Bank, Moscow Credit Bank, Bank St. Petersburg and Binbank.
The largest U.S. and European investment banks operating in Russia include Goldman Sachs, Bank of America Merrill Lynch, JPMorgan, Barclay’s, Deutsche Bank, and UBS. In May 2019, Morgan Stanley announced plans to terminate its investment banking activities in Russia by Q1 2020. The largest foreign-owned commercial banking institutions in Russia include: Raiffeisen Bank (Austria), Unicredit Bank (Italy), Citibank (U.S.), HBSC (U.K.), and Deutsche Bank (Germany). In 2013, new laws were enacted forbidding foreign banks from establishing branches in Russia, permitting only subsidiaries to be created.
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