Russia banking sector could have 35% in foreign capital in 7 yrs

MOSCOW, December 21 (RIA Novosti) - Russia's finance minister said Thursday there is no threat of foreign capital's dominance in the country's banking sector as its share will not exceed 35% in the next seven years.

Some experts earlier claimed that following Russia's accession to the World Trade Organization, large foreign banks would significantly increase their share in the Russian banking sector and have a competitive advantage over Russian banks.

But Alexei Kudrin said the presence of foreign banks in Russia will increase gradually and will not exceed 30-35% in the next five to seven years.

"For five to seven years, the share [of foreign capital in Russian banks] could increase to 30-35%," Alexei Kudrin said, adding that now the share of foreign capital in Russian banks is 12%.

He also said competition with foreign banks will boost the development of the domestic banking sector and will benefit Russian consumers.

The Russian Central Bank (CBR) said on its Web site December 6 that the asset value of Russia's top 30 banks increased 32%, year-on-year, in the first 10 months of 2006, to 8,646.31 billion rubles (about $326 billion).