The banking system of Russia is heterogeneous: it contains large and small players, as well as institutions in which the most important indicator varies - the state’s share. What is the specificity of the work of credit organizations, where the predominant amount of assets belongs to the authorities?
What is a state bank?
Credit institutions owned by the authorities (based on the ownership of the controlling block of shares) and managed by them belong to state banks. The main function of such organizations is lending to business entities that are significant from the point of view of the national policy, as well as related investment and settlement transactions. As a rule, state-owned banks of Russia serve key, strategically important sectors of the economy that affect the country's position in the international business arena, and which are difficult for credit institutions with private capital to work with.
The government, owning its own financial institutions, conducts foreign trade, regulates the most important domestic sectors (such as agriculture), pursues policies in the regions of the country, and manages investments in national projects. Thus, there are a number of clear criteria to determine which banks are state owned. In Russia, such institutions play a key role in national financial policy.
Central banks. Who owns the Central Bank of Russia?
The Central Bank (Bank of Russia) is a subspecies of the state credit institution. Its functions are macroeconomic regulation of the national economy, control over the work of financial organizations with private capital, participation in international monetary processes, facilitating the implementation of strategic development programs of the country. The Central Bank manages the strategic gold and currency reserves of the state. The legal status of the Central Bank of Russia, experts believe, is very ambiguous. On the one hand, the authorized capital of the Central Bank of our country is the property of the federation.
However, the institution is responsible for the obligations of the state (but not vice versa), conducts activities at the expense of its own income. It turns out that from the point of view of the law, the Central Bank of Russia is independent of the government of the country. It will not be entirely true to argue that the Bank of Russia is a public authority. If you adhere to this point of view, the state does not have an absolute scope of authority to use the assets of the Central Bank in the form of gold and foreign exchange reserves. And if, for example, the government expresses such intentions, then the Central Bank has the right to appeal to international courts.
Central Bank: assets abroad
The Central Bank owns the so-called Roszagranbanks - credit institutions operating abroad. Among them are Moscow People's Bank (located in London), Ost-West Handelsbank (Frankfurt), Eurobank (Paris). Thus, Russian banks with state participation are in the most developed countries of Europe.
The role of financial organizations of this type is to improve the mechanism of settlement and credit operations with foreign entities. Roszagranbanks are able to attract investments for the needs of the state, which is beneficial to the country's economy. As a rule, the profitability of such institutions (and the amount of tax payments to the budget) is higher than that of commercial banks.
The largest state-owned banks in the country
Sberbank of Russia (SB RF) is the largest credit institution with state participation by assets. About 60% of the shares of this financial organization belong to the authorities, 40% - in public circulation. This state bank of Russia was established even during the Soviet era, but the rate of private ownership is one of the highest in the market.
For example, Rosimushchestvo owns 100% of the assets of the Agricultural Bank (one of the main authorities in the structure of banks' assets). Another example of a large credit institution is VTB Bank. The Federal Property Management Agency owns a little more than 75% of the shares of this institution. A rather large share, which belongs to the authorities, is also present in Gazprombank.
Vnesheconombank's special status
Vnesheconombank (VEB) is a credit institution that occupies a specific position in the banking system of our country. The fact is that it conducts its activities without a license and is not subject to supervision, while other state banks in Russia deal with these phenomena. Vnesheconombank is over 90 years old and, from the point of view of the law, it is a state corporation. In the practice of this institution debt obligations are permissible. Vnesheconombank and other state credit institutions, Roseximbank (established to support exports), are being examined. If this succeeds, then in the hands of the authorities will appear an instrument to support foreign trade by providing partial guarantees. However, some experts believe that the old debts of VEB may become such work.
Experts: state-owned banks should be multilevel
Banking market experts note that the development of the country's banking system should have clear principles. One of these experts see a system of subordination between credit institutions at different levels. The banks that should be in the top position, it is proposed to include the Agricultural Bank, as well as RBD and RRDB. Their activities may be related to the financial support of the country's investment policy, the development of the agricultural sector.
At the “second level” - Sberbank, VTB, Roseximbank and VEB. In particular, the functions of the Security Council of the Russian Federation, experts believe, should be concentrated around the tasks associated with saving deposits, and not allow expansion in the trading segments. State-owned Russian banks of the “third level”, as conceived by experts, should be universal: give loans, participate in payments, etc. Entering banks of this category in the first two should, according to financiers, have persistent barriers.
State Bank Efficiency
In recent years, research has been actively conducted related to the development of the Russian banking system. One of them revealed the effectiveness of banks, including state-owned ones. The study also examined organizations with foreign participation. Credit institutions, according to the results of the work of experts, were divided into five groups: state-owned banks taking into account the Security Council of the Russian Federation, state-owned banks that are not related to the Security Council of the Russian Federation, private banks with headquarters in Moscow or St. Petersburg, private banks in the regions, and subsidiary banks of foreign financial organizations.
It turned out that the most effective are state-owned banks of Russia included in groups with the Security Council of the Russian Federation. A list of the many criteria included in the study confirmed this. Their closest pursuers on a work quality scale were private banks from Moscow. However, the effectiveness of the Security Council of the Russian Federation turned out to be slightly lower than the average for the group of ten largest banks in terms of assets (but still higher than the average for the above five groups of institutions).
State Bank Reliability
Many financiers (and commoners) believe that state-owned banks in Russia are more reliable than private ones. This, as the practice of credit institutions shows, is generally true. Experts believe that there are a number of quite logical explanations for this. Firstly, due to greater historical experience, state-owned banks have extensive tools for regional expansion and gaining customer confidence. Secondly, financiers believe that the state often sponsors projects, not delving too deeply into profitability analysis, which is completely not characteristic of private credit institutions. Thirdly, state-owned banks allow themselves to hire people at lower salaries, which generally improves the operational efficiency of organizations and competitiveness in comparison with private banks.
State Bank Prospects
Among some experts of the financial market, the thesis is popular that the share of state participation in banks will gradually decrease. However, instead of owning the assets of the institutions, the authorities will seek to introduce the right people into the governing bodies. There is an opposite opinion, according to which the reduction in the state’s share in the banking system has not the most pronounced prospects: the specifics of the regulatory framework is the issue. According to the second point of view, the transformations, if they are implemented, will in fact only reflect the formal transfer of shares (or the exchange of functions) between various government agencies. Among other nuances that determine the prospects of credit institutions with state participation is the share of the Central Bank in the management of commercial banks.
There is an opinion about the need for the Central Bank to withdraw from the capital of private financial organizations, since the position of the Central Bank as an owner contradicts the task assigned to it of supervision and work in the interests of the economy of the whole country. The year in which state-owned banks of Russia, 2014, are likely to be subject to reform, a list of possible changes will most likely be published on the pages of the Central Bank's bulletins or specialized media.