The Factors Affecting the Probability of License Revocation of Russian Banks

The period from 2013 to 2019 is characterized by mass revocation of licenses from Russian banks, which raises the question of what factors affect the likelihood of revocation of licenses. Many researchers have already studied certain groups of factors (financial and macroeconomic), but there is still a question in the field of research that forms hypotheses for this work – the influence of the type of property and the location of the head office. The hypotheses are based on contradictions identified in the literature on the influence of these factors on the probability of revoking licenses from banks. A logit model with a 2-quarter lag was used to verify hypotheses. The main source of data for forming a sample was an information resource – banki.ru. Data represent the financial characteristics of banks, as well as data on bank ownership type and location of the head office during the period 1 January 2015 to 31 December 2019. As a result, the statistical significance of the studied factors (type of ownership and location of the head office) was found. It was found that state-owned banks are less likely to revoke licenses, and those with foreign capital are more likely to do so. It was also found that the location of the head office in Moscow or Saint Petersburg increases the likelihood of revoking the license.