RUSSIAN CORPORATE LENDING: DYNAMICS OF DEVELOPMENT AND DEGREE OF COMPETITION BETWEEN BANKS

Abstract

The values of the structural indicators for assessing the degree of market competition make it possible to identify the modern Russian market of bank corporate lending as highly concentrated and, therefore, in need of supervision not only from the main financial regulator, but also from the antitrust services. The article explores specifics of banking competition. The competitive advantages of modern banks are determined based on the high quality of the services provided, their wide range, uniqueness and individuality. The model of the functioning of the Russian banking system as well as policy for supervision of the Central Bank of the Russian Federation in relation to the corporate lending market are studied. The results of the statistical analysis on the development of the corporate lending market of Russia in 2017-2018 are presented: total lending, weighted average interest rates on loans (including SME). We also capture the trends in loans for each of the Top-15 Russian banks with the largest corporate loan portfolio in 2017-2018 and explore their competitive advantages. To assess competition in the Russian corporate banking, the concentration ratio and the Herfindahl-Hirschman index are calculated based on the amounts of loans issued to corporate clients in 2012-2018. The revealed trends illustrate that the corporate banking operates in an increasingly monopolistic environment. The largest banks supported by the state reinforce their strong market position.