MOSCOW, November 18 (Sputnik) — Russia is experiencing a boom in the currency exchange industry, as most banks are closing branches largely due to massive banking license revocations performed by the Central Bank of Russia.
During the January-September period the total amount of operating cash desks in Russia skyrocketed by 12%. This development is fueled by the crisis in the banking industry, which triggered the closure of many branches that previously exchanged currency within a centralized banking system.
Russian banks have been reducing the number of branches that serve clients since early 2014 after roughly four years of steady growth. According to Central Bank of Russia (CBR) data, Russian banks reduced the amount of outlets from 43,200 to 42,400 units in January-September of this year. Such measures were triggered by the deterioration of the economic situation caused by the Ukrainian international crisis.
On May 1, 2010, the amount of banking outlets reached 37,700 units; on January 1, 2011, there were 38,400 branches, followed by 40,500 on January 1, 2012, and 42,600 on January 1, 2013. The Ukrainian crisis inevitably forced banks to minimize costs by closing outlets.
On the contrary, the amount of operating cash desks during the same period rose by 12%, from 8,400 units in January to 9,400 in September. Considering the number of operating cash desks rose only 13% during the whole of 2013, this accelerated pace is a substantial change.
As the Russian rouble depreciates dramatically (45% this year alone), increasing demand for hard currency by the population has led to banks to restructure and adopt different strategies. During the January-August period Russian citizens purchased a record $45 bln of currencies, according to CBR data. This is an annualized 50% rise, as during the first eight months of 2013 Russians bought only $13 bln worth of currencies.
CBR banking sector resolution measures, intact since the banking micro crisis of 2013, also contributed to a rise in the amount of exchanges and a decline in the number of banking outlets. Some smaller banks have cancelled their operating licenses, while a total of 71 banks have been shut down by the CBR.
“What is the point of having an outlet that serves only a few blocks?” said Viktor Shipov of Binbank. “This sort of branch banks are likely to be replaced by the mobile office trailers.” In his opinion, the problem is the low efficiency of branch banks, as most of the services they have to offer to clients do not meet adequate demand.
Meanwhile, Russia still has less banking outlets than the rest of Europe. In Russia, there are 290 bank branches per one mln people, while in Europe the average figure is 470.
