Year of Graduation
Strategical Development of a Large Russian Bank: Territorial Aspect
Faculty of Management
Quantitative and qualitative expansion of the branch network has become one of the priorities for Russian banks in recent years. However, trend of reducing the number of banks as well as number of their branches was observed over the last tree years in Russian banking industry, the reasons of this phenomenon may be either economic crisis or inefficient management in a changing banking market. The market is experiencing the growth in the level of competition, accordingly there is a need to consider the fact that the number of customers in each region market is limited and banks should compete to get each of them. Amid these events cost optimization and quality control are getting to be key objectives for the banks, which are held to compliance with the conditions of modern bank management: strategy/concept, planning, process management, analysis regulation and control. Thus one of the most important factors for strategy of regional network reviewing has become the differentiation of regions on the potential of their development.This study explores the development potential of 151 Russian cities for the development of the branch network of JSC “Sberbank of Russia”. The primary aim of the research is to assess the regional markets’ potential followed by assignment development scenarios. To pursue the stated goal it is be necessary to:1. Describe the theoretical basis, the nature and purpose of network development strategy of the bank;2. Describe the current situation in the Russian banking industry;3. Describe the current level of differentiation of the Russian regions;4. Examine the operation of JSC “Sberbank of Russia” in terms of regional development strategy;5. Identify research methodology;6. Identify indicators affecting the development of the region’s markets;7. Examine market’s potential by using the selected indicators;8. Assign development scenario to each of the regional market.The study discusses the concept of strategy, peculiarity of banking strategy, strategy of regional bank network development, the key components in its construction and implication. Also for understanding of the overall situation there is a description of the Russian banking industry and of uneven level of economic development and competition in the territorial aspect.The research is conducted to solve the problem of the company “Sberbank of Russia” reasoned by the revision of the regional expansion strategy, whereby the company is being analyzed in this aspect.Three groups of indicators: the socioeconomic potential, strength of competition and the position of the bank and three correcting indicators are applied to solve the problem. An expert decision making method and regression analysis were carried out to choose these indicators and to determine their weight inside their group.Ranking and grouping methods are applied to assign the appropriate scenario to each city concerning their potential.The results of the research will be used by Territorial Development Block of “Sberbank of Russia” to appoint focus-objectives to branches in first-priority cities in accordance with the planning system aimed at increasing the bank’s profit getting from these cities.