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  Thursday, September 19, 2019
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The number of banks in Russia may decrease by one-third in 2006
The number of banks in Russia may decrease by one-third in 2006 as more and more small banks merge into larger entities, a banking executive said Thursday. Pavel Gagarin, chair of Gradient Alfa investment group, said the number of banks operating in the country may drop to 800 by the end of this year from the current 1,200. "There is an outflow of capital from small to medium-sized banks and from medium-sized [banks] to large ones," he said. Gagarin said the country's top hundred banks are unlikely to be affected by the trend. Smaller banks belonging to industrial groups are also unlikely to opt for mergers if their owners are strong enough and if there are no legal infractions, he said. Risks for large banks, Gagarin said, could be managerial, administrative or political, or come from inadequate protection of personal details and other sensitive information. The risk of financial loss at large banks is lowest, he said, as banking heavyweights usually have additional sources to prop up their liquidity. Gagarin said large Russian banks stood to benefit from the country's accession to the World Trade Organization, as WTO membership would open up new possibilities for working with Western banks.
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