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Alfa Bank deserves a special mention for its performance in the past year. The plucky private-sector bank fought off a run on its deposits in May to post the best annual profits it has ever achieved. However, the best bank in Russia award goes to state-owned Vneshtorgbank (VTB), reflecting the realities of business in Vladimir Putin's Russia.
The reality is that the Kremlin is currently obsessed with control, and that certainly goes for the banking sector. VTB appears to be the favoured son of the administration. When Guta Bank went bankrupt in April, VTB was told to take it over by the government, reportedly much to the initial displeasure of VTB. Nonetheless, the takeover gives VTB, traditionally a corporate bank, a strong branch network to take advantage of the growing retail market.
In another government-sanctioned takeover, VTB bought a stake in Promstroybank, one of the biggest retail banks in St Petersburg. This may be just the tip of the iceberg – VTB says it plans to invest about $700 million in expanding its domestic retail business over the next 10 years, while consolidating the state's overseas banking assets.