Russia Banking & Financial Services Report Q4 2017
We expect Russia's banking and financial services sector to return to stronger positive growthin USD terms after a lacklustre 2015 and 2016, as the country's economy emerges from a two-yearrecession. Overall, given that the Russian economy still strongly revolves around the extractives industries,alongside the various existing barriers, the banking and financial services' sectors are expected to remain avery small contributor to the country's Gross Value Added (GVA) over the next five years. Key structuralbarriers for sector growth are: the Russian financial sector being largely dominated by state-owned orcontrolled banks; significant government-imposed barriers to foreign bank participation, and the limitedreluctance of many domestic households to channel savings and investments through organised and formalchannels. While the consumer outlook for the country's household incomes are expected to increase from2017, there are still very few households in the important USD25,000+ category for asset managementfirms to fully capitalise on, which provides another impediment to growth.