Oligarchs still in the driving seat

Russia has done little to reform a banking sector that is still littered with hundreds of thinly capitalized and barely functioning institutions. But there are some signs of improvement. A stronger economy has made it more attractive for the larger commercial banks to start lending to Russian companies. It’s a new game for them.

The Russian banking sector has begun to recover, no thanks to the government. With the economy continuing to grow strongly there is more money about and confidence is slowly returning. President Vladimir Putin may not have completed much in the way of banking sector reform but he has delivered on stability. With more money in the economy, and production and sales growing strongly, the leading commercial banks have been capitalizing on their head start and are pulling ahead of the field.

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