The Effect of External Economic Restrictions on the Key Performance Indicators of Russian Banks

Since March 2014, the dynamics of the Russian financial sector have mainly been influenced by a number of external economic restrictions (sanctions) imposed by the United States, the European Union and by a number of other countries on different Russian banks. In the situation of uncertainty of forecasts regarding the scope and duration of the imposition of sanctions, it becomes more important to analyze the effect of external economic restrictions on the key performance indicators of Russian banks and to identify the opportunities to minimize the sanctions negative impact on banking sector at the national and international levels. In the context of this study, the impact of financial sanctions, which implies, mainly, restrictions on foreign borrowings and foreign economic activities for Russian financial institutions will be analyzed. This study aims to examine the current state and the prospects for the development of Russian banks and the possible ways for the improvement of their efficiency indicators in the context of international sanctions. The comparative method and regression analysis will be applied in order to specify the prime factors which have influenced significantly the changes in the key performance indicators of Russian banks.