Small Russian banks explore alliances and umbrella partnerships with major universal banks
At the Central Bank of the Russian Federation, discussions continue about how small banks could band together or align with a large universal credit institution. The topic emerged during a meeting attended by representatives from banks and the Russian Banks Association, and was summarized by Alexander Danilov, Head of Banking Regulation and Analytics at the Central Bank, in a report cited by Vedomosti. Two distinct models were described: an Alliance and an Umbrella arrangement.
Under the Alliance model, banks holding a basic license can form a management company that is funded by the contributions of its members. In this arrangement, member banks are jointly and severally liable for each other’s obligations. Coordination of the alliance’s activities would require a suitable regulatory framework, and the alliance would operate as a central hub, acting as a single point of contact with the Central Bank while managing operations for the member banks.
In contrast, the Umbrella model envisions a large universal institution taking under its wing smaller banks, regardless of their license type. Participants in an Umbrella arrangement would either pay royalties or become minority shareholders. In return, the parent bank would offer operational and commercial support, helping local banks scale their activities.
The Central Bank reinforces that such partnerships could improve business models by reducing costs, including expenses for information technology and marketing, while also expanding scale and the customer base. This approach aims to strengthen the competitive position of smaller banks in a changing market,