Ignoring them won’t make them go away

Local Russian banks now see VTB and Sberbank as international players, somewhat removed from their world. At the same time, international banks still do not consider them a real threat. The truth is that both sets of rivals should be worried.

  • 04 Dec 2012
Email a colleague
Request a PDF

VTB and Sberbank are different beasts with different goals. But when they talk about their development strategies, their competitors at home and abroad would do well to pay attention.

VTB sees itself as an international player — its goal is to become one of the top five banks in the world. To that end it has spent the past few years setting up offices around the globe.

Sberbank, meanwhile, acquired investment bank Troika Dialog this year and has opened an office in London. But it is now consolidating and has yet to decide whether life abroad suits.

Backing up the ambition, both banks have been producing the results.

Dealogic ranks VTB and Sberbank first and second, respectively, in the Russian international bond table. In the CEEMEA table, VTB stands in second place and Sberbank is seventh. By contrast, in 2010 they were only third and 9th respectively. In 2007 they were even further down, at 12th and 20th.

Outside Russia they can scoop up opportunities in some politically sensitive areas where western banks fear to tread. Belarus, which RBS has publicly backed away from, gave its recent Eurobond mandate to VTB and Sberbank. The Russian banks will be able to exploit this advantage over time, and that should be enough to warrant some regard from the west.

Meanwhile, at home, Sberbank holds 46% of Russian deposits. VTB is a force in local capital markets too. The two respectively hold first and second positions in the local bond league tables.

The Central Bank of Russia could decide to prevent them from growing much further, although it has not yet publicly done this. But in any case, domestically they are already very hard to compete with.

There are nearly 1,000 banks in Russia and consolidation is inevitable. If VTB and Sberbank crowd out some smaller local players, this it might happen sooner rather than later. So the local banks should also be worried.

VTB and Sberbank are making ground domestically and internationally. Competitors looking the other way and pretending they are no threat in either market won't stop their relentless grab of market share. If anything, it will make it more effective.

  • 04 Dec 2012

Bookrunners of Global Covered Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 12,659.07 70 5.35%
2 UniCredit 12,127.14 83 5.12%
3 LBBW 10,943.55 71 4.62%
4 UBS 10,837.07 59 4.58%
5 Natixis 10,799.35 60 4.56%

Bookrunners of Global FIG

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 78,545.19 341 6.03%
2 Citi 77,248.51 402 5.93%
3 Bank of America Merrill Lynch 76,833.52 308 5.90%
4 Goldman Sachs 70,739.11 604 5.43%
5 Morgan Stanley 67,369.77 382 5.18%

Bookrunners of Dollar Denominated FIG

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 64,710.03 242 10.45%
2 Bank of America Merrill Lynch 64,638.73 260 10.44%
3 Citi 60,418.28 303 9.76%
4 Goldman Sachs 54,058.43 539 8.73%
5 Morgan Stanley 52,460.86 299 8.47%

Bookrunners of Euro Denominated Covered Bond Above €500m

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Natixis 7,883.86 30 6.98%
2 LBBW 6,252.10 27 5.53%
3 Deutsche Bank 6,252.08 21 5.53%
4 UniCredit 6,211.91 25 5.50%
5 Credit Agricole CIB 6,198.22 24 5.48%

Global FIG Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 Morgan Stanley 365.83 497 7.62%
2 JPMorgan 332.66 618 6.92%
3 Bank of America Merrill Lynch 299.89 590 6.24%
4 Goldman Sachs 276.71 375 5.76%
5 Citi 264.54 592 5.51%

Bookrunners of European Subordinated FIG

Rank Lead Manager Amount €m No of issues Share %
  • Last updated
  • Today
1 HSBC 7,584.11 21 12.61%
2 Barclays 4,776.16 18 7.94%
3 BNP Paribas 4,744.51 21 7.89%
4 Credit Suisse 4,518.72 16 7.51%
5 UBS 3,877.49 18 6.45%