Russia: Big brother helps little brother
Government support has prevented a systemic run on the banks, but funds are not getting through.
Consolidation in Russian banking is finally taking place, raising hopes that the system will be able to effectively meet the demands of the real economy.
"The message from the authorities is that they are ready to support consolidation in the banking sector," says Dimitri Kryukov, managing partner at Russian fund manager Kazimir Partners, adding: "Right now every bank is struggling."
Despite the authorities in the Kremlin having pledged Rb3 trillion ($108.5 billion) or so to prop up the banking system, market participants say that it will take time before the measures take effect.
"The liquidity issue in the inter-bank market has still not been resolved – the government money has not filtered down yet," says Steven Meehan, chief executive of UBS in Russia.
"The government has made the right decisions very fast and given an impressive level of support for the banking system, but implementation has been slower than hoped for"
Johann Jonach, Alfa Banking Group
Johann Jonach, recently appointed chief executive of Alfa Banking Group, the leading Russian privately owned financial services provider, agrees.