Russia
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Russia

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Two trends in Russian banking are making this an especially competitive and exciting time. "The rush there at the moment is great," says one banker. "It's like 1997 again." Let's hope what happens next is not too similar to the aftermath of that earlier boom.

On the regulatory side, the government is finally introducing banking reform, which will consolidate an overcrowded sector. From a commercial point of view, growth is rapid, particularly in four sectors - corporate bonds, retail deposits, mergers and acquisitions, and consumer loans and mortgages.

The growth in consumer loans and mortgages is putting pressure on the banks, because they are finding it difficult to raise long-term lending themselves. As a result, the banks that will thrive in these sectors need to secure long-term financing from the bond markets. A handful have successfully launched international bonds in the past 12 months, including Moscow Narodny, Uralsib and MDM Financial.

In corporate bonds, the market is on fire right now. Indeed, most analysts expect a correction in the rouble market soon, where domestic investors are not examining credit quality but merely searching for yield.

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