The banking sector of the EAEU is shrinking: more than 60 banks have left the market

Over the past five years, the number of banks in the Eurasian Economic Union has decreased by 62 financial and credit institutions, from 496 to 434. This is partly due to the departure of foreign banks from the market, which decreased by 28 during this period.

Thus, at the end of 2024, there was a steady downward trend in the total number of banks in the Eurasian Economic Union. According to official data, the number of credit institutions in the region decreased by 10 over the year, from 454 to 444 banks, which is 97.7% of the 2023 level.

The decline has been observed for the third year in a row and affects almost all countries of the union. The dynamics are particularly noticeable in Russia, the largest banking market in the EAEU. There, the number of banks fell from 361 to 353, which corresponds to a reduction of 2.2%. Since 2020, their number has decreased by 53 financial and credit institutions, with 22 fewer banks with foreign capital.

Over the past year, Kyrgyzstan has seen a decline from 23 to 21 banks (91.3% of last year's level). At the same time, the National Bank of the Republic is currently considering the possibility of admitting three commercial banks to the sector: Asman, Murass and Kylim.

Thus, in the very near future, there may be 24 banks in the republic, which is even more than in 2020. At the same time, in other countries (Armenia, Belarus, Kazakhstan), the indicator remained stable.

If we look at the situation since 2020, Armenia has even gained one bank, while Belarus and Kazakhstan have lost three and five banks, respectively. Moreover, the number of banks decreased in Belarus in 2022 and in Kazakhstan and Russia in 2021.

The accompanying decline in the number of bank branches across the EAEU as a whole also points to a process of consolidation or withdrawal from the market. Over the year, the number of branches decreased from 1,559 to 1,499 (i.e. 60 branches closed).

The number of banks under foreign control also showed a moderate decline. Overall, their number decreased from 123 to 95 across the EAEU. This was mainly due to the withdrawal of banks with foreign capital from the Russian Federation, which may indicate increased caution among investors amid geopolitical tensions in the region.