Andrei Kozlov repeatedly said that he considered risk managment to be one of the most promising professions in the financial industry. As on many other issues, Andrey Andreevich was a thinker well ahead of his time.

The global crisis was caused by poor risk management and by the very agencies that are supposed to measure risk. Indeed the very companies that were supposed to have the most sophisticated risk management systems in the world and which invented risk management techniques failed. Yet the crisis ironically demonstrated how much we rely in the modern financial word on risk management and on rating agencies.

The refinancing of debt is a normal, everyday process for banks in any country, but opportunities for doing so are cut back sharply during a crisis. That is what happened in Kazakhstan, where a large portion of bank funding was drawn from the international capital market. The inability to refinance that debt made restructuring inevitable. Political factors made negotiations with investors more complex in the case of Kazakhstan than for, say, Russian banks: cases of less than entirely successful state intervention aimed at “saving” certain major banks were taken as a signal to re-evaluate the associated risks. Even so, the Kazakh market remains attractive for top players in the banking sector. New loans are, of course, a possibility, but regulators [in Kazakhstan] are taking a whole range of steps to open up new funding opportunities for both banks and the real sector, including access to Russian capital and the resources of international financial institutions and the development of a domestic debt market. I expect there will be a process of consolidation, including an increase in the market share of foreign banks, and that can also be seen as normal for a country whose economy has been weakened by the crisis but at the same time has clear prospects for further development.

According to an official press release dated 18 February 2010 the Société Générale and InterRos groups have agreed to merge Rosbank with SG’s other Russian subsidiaries. BSGV and Rosbank will form a single structure with two independent brands, while Rusfinans Bank (a consumer loan specialist) and DeltaCredit (mortgages) will become wholly-owned subsidiaries of the new company. Once the merger is completed (and pending official approval) an 81.5% stake in the new bank will be held by SG, while most of the remaining equity will belong to InterRos. On the basis of RusRating’s calculations, the combined credit organisation will rank seventh in Russia by assets and will be the country’s largest private-sector bank.

In accordance with the latest figures published by the Central Bank, following the adoption of a law on minimum capital requirements 122 of the 145 banks whose own funds fell below the threshold were able to find additional capital by the end of 2009. The CBR expects that the emphasis in 2010 will shift to mergers and consolidation, in place of the state resources that were the main driver of last year’s capital growth across the banking sector.