Advantages of buying banks in the Russian Federation

Advantages of buying banks in the Russian Federation

Buying an existing bank is a very crucial step towards expanding and giving value to your business. An important step on the way to the acquisition of a financial institution is to determine the correct vector and the choice of weighty factors that are priority for you in view of the further goals of your business. In this article, we will look at the typical advantages of buying banks in the Russian Federation.

Buying a bank in the Russian Federation: advantages

A special factor for choosing a bank is the analysis and determination of its main characteristics, price differentiation, as well as the bank’s reputation.

At the moment, in Europe there are a different number of banks depending on the size, type of license, volumes, duration of work, and so on.

Obtaining a banking license in the Russian Federation today is a rather complicated, long process that requires laborious preparation, an impressive amount of time and effort. In view of these factors, we propose to consider the possibility of purchasing the bank’s shares and will be able to accompany the negotiation process for the possibility of acquiring shares in current banking institutions.

We recommend that you draw your attention to financial institutions in the Russian Federation, where we will be happy to advise you on available options and help you choose the best commercial, universal, specialized or investment bank that suits your requirements.

Our specialists are experts in the sale and purchase of banking institutions. We will be able to choose the most favorable option for you in view of your wishes. At the moment, we are cooperating with more than 10 banks that are ready to consider the possibility of selling shares or partial redemption, investment, etc.

The starting price for a bank varies from $ 10 million.

Before making a final choice, we advise you to pay attention to these indicators and aspects:

Balance sheet profit of banks in the Russian Federation

Balance sheet profit is one of the main indicators by which you can assess the efficiency of the company. The bank may at some point face difficulties and not make a profit. This is not a critical situation. However, if the bank is constantly losing money, then this is bad. The most optimal option is a situation when the bank receives profit from year to year.

Banking institution availability

When choosing a bank, you need to pay special attention to the location of ATMs and branches. In addition, you should separately assess the possibilities offered by online banking and relate them to your personal needs.

Bank assets

This concept means everything that was invested by the bank in its capital and the money of those who made deposits in this bank in order to make a profit. The main types of assets are investments in securities, loans issued by a bank, investments in precious metals, property (equipment, buildings, etc.), money stored in accounts with other banks. It is more expedient to choose the bank that gradually increases the amount of its assets, or keeps it in a stable state.

Capital adequacy ratio (N1.0)

According to this standard, it is possible to determine whether the bank is able to cover possible losses received from investments with its own funds. In order to calculate the standard H1.0, all assets owned by the bank must be divided into groups based on the level of risk and multiplied by the appropriate correction factor. After that, it is necessary to divide the capital of the banking institution by the amount of risk-weighted assets and multiply by 100%. The standard obtained in this way should not be less than 8%.

Instant liquidity ratio (H2)

Using this criterion, you can assess the bank’s ability to cope with those obligations that are assigned to it during the day. Here, for example, you can give the opportunity to give a client money that he would like to withdraw from his account, or close a demand deposit.
It goes without saying that all clients will not come for money at the same time. But, to calculate the H2 ratio, you need to estimate the amount on all demand accounts and other obligations that the bank may face. The next step is to sum up assets that can be converted by the bank into non-cash or cash during the day – taken from the cash desk, sold or withdrawn from other banks. In order to calculate the standard, the amount of assets is divided by the amount of liabilities and multiplied by 100%. The H2 index obtained in this way should not be less than 15%.

If you have any questions regarding the purchase of banks in the Russian Federation, please contact our team.

For details: Julia.z@eternitylaw.com / Telegram @juliazhil

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