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Eurasian Payments Report Overview Part 1 – Eurasian Overview 2025

1. Eurasian Overview

Banking sectors in Europe and the formerly state-owned Eurasian banks have completely different historic roots. In addition, their transformation has followed separate strategies. This overview section illustrates the evolution of the Eurasian banking sector to date.

Regional Integration – Eurasian Economic Union

The Eurasian Economic Union (EAEU) was formally launched on January 1 2015, creating a single market of 165 million people with the participation of Russia, Kazakhstan and Belarus. The treaty bringing the EEU into effect was signed in Astana, the capital of Kazakhstan, on May 29 2014.

Though Russia is often accused of trying to revive the Soviet Union, at least as far as the EEU is concerned its aim is to achieve as large and efficient a customs union as possible. This will roll back some of the negative effects of the collapse of the USSR: during the USSR’s existence, trade and investment flows were seamless given universal use of the rouble as a common currency, the absence of internal frontiers and the prevalence of Russian as a common language.

Trade and investment flows between Russia, Kazakhstan and Belarus are substantial – to some extent, EEU sceptics say, because few other countries want their manufactured products – but with the break-up of the USSR, the new nations set up separate currencies and border controls. These obstructed the old economic ties even though the old patterns of exchange were mostly retained, and the EEU seeks to minimise or abandon such obstacles. The three participating countries see the EEU as the equivalent of other trade blocs such as NAFTA, Mercosur and the European Union (EU).

Flowing from a proposal by Kazakhstan, what is now the EEU was initiated in 2000 by five founder governments – Russia, Belarus, Kazakhstan, Kyrgyz Republic and Tajikistan. Cooperation between Russia, Belarus and Kazakhstan was intensified and these three launched a ‘Single Economic Space’ from January 1 2012, in line with their previously agreed roadmap, establishing a customs union with free movement of goods, capital and labour.

Modelled on the European Union, the EEU is managed by a central executive body, the Eurasian Economic Commission, with headquarters in Moscow and generally referred to as ‘the Commission.’ Like the Brussels commission, the competences of the EEU body include trade negotiations with other blocs.

Meetings of the Interstate Council of the EEU are attended by high-level delegations from Russia, Belarus, Kazakhstan, Kyrgyz Republic and Tajikistan. In September 2013, Armenia announced its intention of joining.

The launch of this single economic space, in the words of Russia’s Vladimir Putin, was “the first real step … towards restoring natural economic and trade ties in the post-Soviet space.” However, the big prize for the EEU would have been the adherence of Ukraine, now bitterly divided between its Russian-speaking east and its EU-leaning west: among the former USSR states, Ukraine is second only to Russia in the size of its population.

Most of the former Soviet Union has become polarised between states leaning towards the EU and those joining the EEU. Within this mix, Azerbaijan is attempting to follow an independent path while Moldova and Georgia have signed association agreements with the EU. In 2017, Moldova joined the EEU as an observer, and in 2020 Uzbekistan also joined the EEU as an observer, which is one stage short of full membership. Observer status does not entitle Uzbekistan or Moldova to any economic benefits, instead giving countries the right to participate in EEU meetings.

Though Russia, Kazakhstan and Belarus amount to 175 million people, equivalent to about 65% of the former USSR, Russia accounts for over 80% of the EEU’s population. Further steps are planned, but critics say that integration has been limited so far and that the EEU is little more than a forum for Russia’s bilateral relations with Belarus and Kazakhstan.

Western sanctions against Russia indicate that the EEU’s solidarity is already being tested. When Russia announced a ban on certain EU food imports in August 2014, Kazakhstan and Belarus refused to implement the ban, having previously refused to act against Ukrainian imports. Kazakhstan’s banks have since experienced difficulties in dealing with Western counterparts, leading the government to point out that it retains the right to leave the EEU.

More recent sanctions applied by the EU, UK and US to Russia (regarding its encroachment into Ukraine) and Belarus (relating to political issues and ‘state terrorism’), have affected the financial sector and international trade (see below regarding the 2022 Russia-Ukraine conflict).

The CIS, or ‘Commonwealth of Independent States,’ which initially embraced the member states of the former Soviet Union with the exception of Estonia, Latvia and Lithuania, advocated establishment of an electronic common currency for its member states. Under the Soviet Union, the rouble was the common currency for the 15 Soviet republics until the breakup of the currency union in 1992-93, when it was replaced by 13 different currencies outside Russia (including those of the Baltic states).

Kazakhstan called for a CIS working group to be set up to develop proposals for a common currency, which would enable electronic payments and transfers of funds between government agencies, companies and individuals domestically and between member states. At the time, the CIS consisted of 11 member states (before the withdrawal of Georgia in August 2009) with some components for promoting cooperation, including a department for interstate banking cooperation.

CISPI, the Commonwealth of Independent States Payments and Securities Settlement Initiative, was launched in 2004 to overcome common challenges in modernising the CIS region’s payment systems, to develop a common approach where possible and to do the groundwork for future regional cooperation. Supported by the World Bank, the CISPI’s secretariat services were supplied by KISC, the Kazakhstan Interbank Settlement Centre, but it has been inactive in recent years.

In 2009, after the credit crunch, members established the Eurasian Economic Community Anti-Crisis Fund. Eurasian Development Bank, with Russia, Kazakhstan, Armenia, Tajikistan, Belarus and Kyrgyz Republic as members, also encourages regional integration, though its priorities are industrial rather than financial.

Up until 2022, most European banks were disposing of their Eurasian banking networks, while Sberbank and VTB, the two biggest Russia banks, were promoting regional integration through their banking operations in other Eurasian countries. As of 2024, VTB owned retail banking operations in Armenia, Azerbaijan, Belarus, Georgia, and Kazakhstan.

After expanding into Belarus, Kazakhstan and Ukraine, Sberbank in April 2011 launched the ‘Common Card Tariff Space project’, which allows holders of international cards issued by any of its subsidiary banks to be serviced at any other group bank at preferential rates. Russian banks and Zolotaya Korona, the inter-regional money transfer system, have also been active in developing and promoting a competitive market in remittances for the region’s large migrant working population.

The Russia-Ukraine Conflict – On the 24th of February 2022, Russia invaded Ukraine, a significant escalation of the conflict which began in 2014 when Russia invaded and annexed Crimea, and Russian-backed separatists seized part of the Donbas region in south-eastern Ukraine. Ukrainian president Volodymyr Zelensky enacted martial law and a general mobilisation of all male Ukrainian citizens between 18 and 60.

As a result of international sanctions against Russia, Russian-owned banks, money transfer companies and other payment-related entities have been implemented and many have begun the process of exiting western markets or disposing of their subsidiaries in other countries. International payment services, such as Visa, Mastercard and PayPal have either suspended operations in Russia or pulled out altogether. Remittances between Russia and other markets have been impacted. Russia’s government, central bank, regulators and financial institutions have striven to keep banking and payment operations running as normal, and as of mid-2023, Russians can still access and use most forms of domestic payment methods, such as the MIR card scheme, although some operational disruptions are to be expected.

Ukraine’s industries, infrastructure and economy have experienced major disruptions, which continue as of late-2023 when this report was compiled. Russian-owned banks have been liquidated, Russian-owned money transfer companies and e-money companies have ceased operating in Ukraine, and remittances between the two countries have reduced significantly. Ukraine’s government, central bank, regulators and financial institutions have striven to keep banking and payment operations running as normal, and as of late-2022, Ukrainians can still access and use most forms of payment methods, both domestic and international although some operational disruptions are to be expected.

*CAVEAT: As of late 2023 when this report was compiled, some central bank, commercial bank data and payment statistics had not been made available, but all efforts have been made to source credible data from third parties where possible. Where data is missing, estimates have applied in line with previous growth patterns.

Eurasian Banking Sector – Overview 

Based on total balance sheet assets, most of the region’s big banks are Russian. Sberbank, the biggest, is twice the size of second-ranked VTB Bank (see Russia profile for details). The Russian banks of Société Générale (Rosbank), UniCredit, and Raiffeisen also ranked highly in Russia and Eurasia, although as of mid-2022, both Société Générale and UniCredit had begun the process of exiting the Russian market in response to the Ukraine conflict, while Raiffeisen stated it was exploring its options. In May 2022, Société Générale completed the sale of its entire stake in Rosbank and its Russian insurance subsidiaries to Interros Capital, a company linked to Russian oligarch Vladimir Potanin. This transaction marked Société Générale’s full exit from the Russian market. UniCredit has faced challenges in reducing its Russian exposure. The ECB had restricted UniCredit from issuing new loans and accepting new term deposits from June 2023. The management has indicated plans for a full exit from Russia, emphasizing the need for favourable terms.

Outside Russia, Halyk Bank (KZ), Privatbank (UA), Belarusbank (BY), Kaspi Bank (KZ) and TBC Bank (GE) were the biggest banks in the EA10 countries in 2023.

1.1 - Biggest non-Russian Banks in Eurasia
BankCountryAssets ($bn)
Halyk BankKazakhstan33.97
PrivatbankUkraine18.59
BelarusbankBelarus13.45
Kaspi BankKazakhstan14.96
TBC BankGeorgia12.54
Bank of GeorgiaGeorgia12.08
National Bank of UzbekistanUzbekistan10.33
Bank CenterCreditKazakhstan10.70
OschadbankUkraine9.47
International Bank of Azerbaijan (IBA)Azerbaijan8.04
UkreximbankUkraine6.65
ForteBankKazakhstan7.13
First Heartland Jýsan Bank / ATF BankKazakhstan5.94
Raiffeisen Bank (Aval)Ukraine4.98
UzpromstroybankUzbekistan6.05
BelagroprombankBelarus4.91
Sense Bank (previously Alfa Bank UA)Ukraine2.96
UkrGazBankUkraine4.81
Asaka BankUzbekistan4.70
Note: First Heartland Jýsan Bank was created after the merger of First Heartland Bank and the failing Tsesnabank in 2019 and also agreed to buy ATF Bank in early 2021.
Note: Halyk Bank bank absorbed Kazkommertsbank in mid-2018.
Note: assets as at 31/12/2023.
Note: see Russia profile for the biggest Russian banks.
Source: PCM Research.

Levels of state ownership vary from country to country across the region. At one extreme, Armenia and Georgia have no state-owned banks and are dominated by private, mainly foreign capital, while the Kyrgyz Republic and Moldova have very limited state participation. In Kazakhstan, where the five biggest banks account for 66.44% of sector assets and the banks were fully privatised until the credit crunch, the high level of state involvement is involuntary. Three of the top four had to be taken into temporary state ownership as a condition of government support, but re-privatisation began in 2013-14, and as of 2023 all of Kazakhstan’s top 10 banks are in private ownership.

At the other extreme, Belarus and Uzbekistan have the most pervasive state presence in the banking sector, though both have begun to encourage local private and foreign investment in the last two or three years. Russia, Ukraine and Azerbaijan have a balance of state and private ownership; see country profiles for full details.

In the countries where the state dominates the economy, the tendency is for the biggest bank to be the ‘national champion,’ often heavily involved in activities like corporate and investment banking, project finance and foreign trade as well as retail banking and payment cards. Examples are Belarusbank, International Bank of Azerbaijan and National Bank of Uzbekistan, all of which are state-controlled.

Eurasian Banking Trends 

By mid-2024, the market trends and battlefields of the Eurasian financial services industry include:

Market Trend – Online Banking, Mobile Banking Apps

All Eurasian banks offer online banking services and mobile banking apps to their clients. Further, a fast-growing number of Eurasians have subscribed to a mobile phone. Mobile devices like smartphones, tablets and smartwatches allow for mobile banking any time, any place. Bank clients must first register for the online banking service at their local branch or online.

Pushed by bank customers’ high affinity to smartphones and their demand to use online banking with their tablet PCs or smartphones, many Eurasian banks have started to offer cross-channel online banking services combined with mobile banking apps to connect mobile devices with their existing online banking service platform.

Leading banks in Eurasia have started to combine mobile banking apps with payments on cards, card-less account-based payments and P2P money send functions, as well as QR-code initiated payments and immediate/instant payments in some instances.

Market Trend – Omni-Channel Self Service Banking Online and Onsite

As more and more bank customers demand online banking services through all channels, Eurasian banks have learnt how to benefit from global technology. In parallel to fast-growing online banking use, the number of bank branches continues to decline in all Eurasian countries.

Further, Eurasian banks are fed up with card fraud at ATM devices and are piloting how to get rid of cards as the authentication method for bank clients who want to withdraw cash from their accounts. This has led many banks to begin experimenting with digital ID systems linked to face, voice, fingerprints and other biometric factors.

Self-Service Branches – For many years, the number of bank branches with staff at tellers servicing retail clients has declined as online banking has grown significantly. To some extent, Eurasian banks have begun to replace staff-supported bank services by adding cash deposit functions to ATM devices, and by adding automated self-services devices allowing online access onsite.

New self-service branch concepts are designed for indoor or outdoor use, e.g. as branch-in-shop concepts or off-premise ATMs in rural areas, and are already used by leading banks in many Eurasian countries. It seems that self-service is a perfect fit for the modern lifestyle of mobile bank customers.

Advanced ATM Devices – The ATM is evolving rapidly and has moved from teller replacement technology to greater value-add functionality. First steps have been to add account mini-statements, mobile prepaid recharging and bank advertising followed by cash deposit and credit transfer functions. The latest ATM device technology enables online bank services onsite including loans, coupons, bill payments and international money transfer in order to support unattended self-service bank branches.

Mobile Cash and Contactless ATMs – Neither a card nor a bank account is required to use the recently- launched mobile cash services at ATMs. Mobile cash services connect the mobile money transfer ecosystem with the cash world. Customers can withdraw cash at ATMs from their mobile wallets or deposit cash to ATM. Customers need to register for the mobile cash service. They can then process mobile cash transactions by typing in their phone number or authenticate with a one-time secure code or a mobile TAN. Another technical option is to show a QR-code, sent by the bank to the smartphone, to the ATM device and authenticate then with a mobile TAN to complete the cash transaction.

Market Trend – Banks and NFC Technology 

Since 2012, some Eurasian banks have piloted contactless card form-factors. Additionally, more and more banks consider combining mobile payment services with mobile banking and mobile money transfer into one singe mobile app.

In a first step, the banks have piloted new form-factors of contactless cards in selected niche markets:

From 2016, early moving Eurasian banks started to replace their mobile SIM SE NFC payment pilot with mobile HCE NFC payment services combined with banking apps.

In parallel, a number of mobile NFC payment services and mobile wallet services that were not linked to the current account of the user were phased out. According to banking clients’ response, a wallet-based or app-based payment service that is not linked to the current account of the client is inconvenient and has no value.

Market Trend – Biometric ID and Authentication

As a form of digital identity, biometric factors have been gaining ground across Europe in recent years, especially since the EU mandated their use for national ID cards and passports from August 2021. In Eurasia, Halyk Bank (Kazakhstan) and others have begun offering optional biometric factors such as Face ID and Fingerprint ID to customers as alternatives to PIN, signature and other traditional forms of ID.

In the payments industry, banks and other account servicing payment service providers (ASPSPs) have started to support new biometrics technology companies that will develop client identification and authentication systems. They will be dedicated to the research and development of software for the digital verification and authentication of personal identity, through facial, voice, image or document recognition, or fingerprint reading.

With the EU regulator’s decision to mandate Strong Customer Authentication (SCA) as part of the revised payment services directive, PSD2, biometric authentications look set to grow further in importance as part of the payments landscape both in the EU and further afield.

Companies such as Sweden’s Fingerprints (for online payment ID) and the UK’s Fingopay (for physical payments) have pioneered their use in P2P and P2B transactions, while some national ID schemes such as BankID in the Nordics and nemID now include biometric factors alongside PIN in their log-in processes.

In October 2016, Mastercard launched its biometric payment authentication service, Mastercard Identity Check Mobile. Consumers can now validate online purchases with their fingerprint or face using the Mastercard biometric authentication service.

Among others, in 2024, payments-specific biometric initiatives and pilots include:

Mastercard Identity Check – In October 2016, Mastercard launched its biometric payment authentication service, Mastercard Identity Check, to 12 European countries. European consumers can now validate online purchases using 2-factor authentication such as one-time codes sent by SMS or fingerprints in their mobile app.

Market Trend – Banks and Digital Wallets

As EMV security addresses security for cards at ATMs and POS terminals as well as MPOS devices, it can’t be applied to provide higher levels of payment security on the internet. In a first step, 3D-Secure combined with two-factor authentication has been applied to prevent online payment fraud.

However, these security measures do not prevent online fraud because of the use of compromised card data. Unfortunately, many merchants worldwide have not implemented the 3D-Secure and PCI DSS security standards. Additionally, the security problem with online payments on cards is the static use of the card credentials, i.e. PAN, validity of card and card security code.

In order to fight card fraud losses on the internet more efficiently, the international card schemes have started own digital wallet initiatives (e.g. Click to Pay, Serve), and they support Apple Pay, Samsung Pay, Google Pay (previously Android Pay) and even PayPal for applying HCE NFC combined with tokenisation security.

A digital wallet is a payment service that stores all payment and shipping information in one secure place (in the cloud). The digital wallets use HCE NFC combined with tokenisation security and work with all internationally branded credit, debit and prepaid cards, on any connected online device (e.g. smartphone, tablet, or notebook) and on the internet.

By mid-2024, the digital wallet MasterPass was supported by a variety of banks in Ukraine, Russia and other Eurasian states. Meanwhile, the digital wallet VISA Checkout was supported by banks in Kazakhstan and other Eurasian states. Click to Pay replaces both MasterPass and VISA Checkout as of 2023, and CTP is a combined scheme initiative to facilitate e-commerce payments, however, it has not yet been rolled out to all markets where the previous services were in operation.

Additionally, a few innovative banks launched their own digital wallets and digital payment services. In 2018, Chinese Huawei and UnionPay launched Huawei Pay, the digital wallet on UnionPay cards, in Russia.

Market Trend – Banks and Digital Payments

From 2014, the Eurasian financial services industry and competing innovative FinTechs have started to implement digital payment services in combination with their own mobile banking apps:

One objective is to replace the static card credentials and static account details for any payment transaction in any channel by a unique one-time token. In case of implementation, dynamic authentication data is believed to significantly prevent card fraud losses. In addition, the PCI workload and cost for merchants can be minimised.

Leading Eurasian banks and competing FinTechs are also investing in card-less payment services so that they can play a major role in any emerging Open Banking ecosystem.

Market Trend – Banks and Real-Time Payments (RTP)

In parallel to card payments and to online bank payment services linked to current accounts, innovative Eurasian banks evaluate the risks and opportunities of business models for immediate payments in real-time or near real-time.

Immediate payments, also named ‘instant payments’ or ‘real-time payments’, aim to support Eurasian competitiveness and economic growth by dramatically increasing the velocity of money in an economy. With the digitalisation of the economy leading to new consumers’ and retailers’ expectations, real-time payments are now a major focus of infrastructure investment for banks globally. There is speculation that the Eurasian economies are well placed to ‘leapfrog’ more developed markets and implement a real-time payments network since their economies are less dependent on existing card infrastructure. Such a phenomenon has occurred in Kenya in Africa, and in China, and is reported to be underway in Nigeria, Cambodia and other developing markets.

As of 2021, Russia’s instant payment system (the Faster Payment System or FPS) was in operation, having been launched in 2019. These instant payment systems allow individuals to instantly transfer funds using mobile phone numbers and can be used to make purchases, pay bills, and a range of other transfers.

Other Eurasian countries, like Azerbaijan and Uzbekistan, also launched their own instant payment systems during the past 3 years, with more countries coming online in 2023.

Market Trend – Banks, Open Banking, Open APIs

Mobile technologies and new consumer demands are rapidly transforming the financial services industry. More Eurasian consumers embrace open banking and challenge the banking industry. They demand Open Banking services while Fintechs demand standardised, Open APIs to get authorised access to customer account data and banking infrastructure.

Although there is no revised payment services directive (PSD2) in Eurasia, consumers and digital technologies challenging Eurasian banks and Fintechs include Open Banking, Open APIs, and the rollout of digital payment services and mobile apps.

The key question for the Eurasian financial service industry will be how to grant authorised access for their FinTech partners to bank account information, for instance secure access to account balance, payment data, credit risk and others.

For banks, the impact of Open Banking is that they are no longer the only ones that have access to the bank customer information. Bank customers will now decide who they want to grant access to their payment information. Alongside this initiative, with new services based on access to bank accounts (XS2A), banks may lose the direct connection to their customers. To maintain their position in the new Open Banking reality, banks will need to adapt their business and operational models.

By mid-2024, notable challenges for the Eurasian banking industry include:

Open Banking has quickly evolved into a synonym for change in the banking industry that refers to:

Open Banking services usually include bank payments, card payments, account information, bank information. Open Banking expands beyond pure payments. The ‘opening up’ can potentially impact both retail and corporate client segments and banking business domains spanning payments, cash management, lending, savings, wealth management, mortgages and many other value-added services.

The underlying trend of the ‘Open Banking’ concept is the increasing level of control available for bank customers regarding how, when and where they want to use their retail and corporate banking services. Open Banking would allow them to access their account data at different banks through one interface either by using the mobile banking app of their bank or by using the app of a chosen TPP.

According to Eurasian bankers, the key dimensions of Open Banking are threefold: a driver (customer relevance and regulation), an enabler (Open API technology) and a key bank asset (digital identity). This combination allows for attractive, secure propositions and successful partnerships between bank and non-bank service providers of financial and non-financial services.

Open Banking can be characterised as a technology driven evolution of the banking business leading to more transparency, customer choice and control over financial assets and personal data. Open APIs are a key enabler of this evolution.

Open Banking use cases identified in the European markets are composed of banking services, payment services, personal finance management services (PFM) and complementary value-added services. For illustrative reasons, selected use cases for individuals are listed here:

Open APIs involve a publicly available application programming interface (API) that provides developers with programming access to a proprietary software application or web service. APIs are sets of requirements that govern how one application can communicate and interact with another. APIs can also allow developers to access certain internal functions of a program, although this is not typically case for web APIs.

APIs come in many shapes and forms, varying from private (internal, within one organisation), to partner (between organisations) and public (“open”) versions. In all instances, APIs come with technical specifications, testing facilities and clarity under which legal and operational conditions the APIs can be used. ‘Open APIs’ are APIs, which are open to third parties to digitally connect services.

Eurasian Growth and Development Prospects

The impact of the COVID-19 pandemic reversed virtually all GDP growth trends across the world in 2020. Massive and immediate disruptions and halts to global trade, imports and exports, foreign travel and domestic consumption decline due to lockdowns are reflected in GDP declines across most markets in Eurasia, with only Tajikistan, Turkmenistan, and Uzbekistan recording GDP growth in 2020.

With economic recovery now underway, most markets can expect a resumption of consistent GDP growth from 2022 onwards as trade returns to previous patterns.

Armenia and Tajikistan were the best performers among the Eurasian economies reviewed in the Eurasian yearbook, with GDP growth running at 8.3% apiece in 2023. Georgia and Uzbekistan were the next best.

Ukraine’s GDP fell by 29.1% in 2022, the lowest growth rate in Eurasia as the economy reels from the effect of Russia’s invasion. However, in 2022, Moldova’s economy plunged back into a recession (-5.9%) due to the regional energy crisis and supply chain disruptions resulting from Russia’s invasion of Ukraine, given the country’s heavy reliance on imports for food and energy especially on natural gas imported from Russia. Belarus and Russia continue to struggle to achieve real growth and to deal with structural problems, with respective GDP declines of 4.7% and 2.1% in 2022. None of the Eurasia countries reported a decline in a decline GDP growth rate in 2023.

Prices in the region show mixed trends, with only Armenia, Azerbaijan, and Ukraine having any claims of keeping inflation rates under control before the pandemic arrived in early 2020. Since then, continued supply chain issues, trade disruptions, and rising inflation rates worldwide were reflected in 2021 and into 2022. Russia’s invasion of Ukraine in 2022 further worsened supply chain and price dynamics in the region and inflation surged. In 2023, Ukraine, Kazakhstan, and Turkmenistan had the worst inflation performance in the region.

1.3 - Eurasian Growth Forecasts
(GDP figures in %)2020202120222023e2024f2025f
Armenia-7.25.712.68.35.55.0
Azerbaijan-4.35.64.61.14.02.7
Belarus-0.92.4-4.73.94.01.2
Georgia-6.810.511.07.59.06.0
Kazakhstan-2.54.13.25.14.04.7
Kyrgyz Republic-8.46.29.06.25.84.5
Moldova-7.413.9-4.60.72.83.9
Russia-2.75.6-1.23.63.41.6
Tajikistan4.49.48.08.38.06.0
Turkmenistan1.65.06.26.36.56.0
Ukraine-3.83.4-28.85.33.22.6
Uzbekistan1.97.46.06.36.05.8
Source: PCM research.
1.4 - Eurasian Inflation Forecasts
end-2020end-2021end-2022eend-2023fQ2-2024fQ2-2025f
Armenia3.7%7.1%8.6%1.7%4.8%3.0%
Azerbaijan2.8%6.7%13.8%6.9%5.5%4.2%
Belarus7.4%10.4%15.2%6.5%6.0%4.2%
Georgia2.4%13.9%10.9%2.9%4.3%2.5%
Kazakhstan7.5%8.5%15.0%10.0%8.2%5.0%
Kyrgyz Republic9.7%11.2%13.9%9.0%8.4%4.0%
Moldova0.4%16.6%28.6%6.0%4.5%4.1%
Russia4.9%8.7%11.9%5.5%4.7%9.0%
Tajikistan9.4%7.8%6.6%3.0%3.0%3.8%
Turkmenistan10.0%15.0%17.5%10.0%10.0%10.0%
Ukraine5.0%10.0%20.2%11.0%8.7%6.6%
Uzbekistan11.1%9.8%11.4%6.5%6.0%6.2%
Source: Yearbook research.

According to CBR, the Russian central bank, 83.7% of remittances were from Russia to other Eurasian countries in 2020. There was a negative balance of $4.79 billion between Russian remittances to the Eurasian region and those from Eurasia to Russia, reflecting the movement of people from non-Russian Eurasia to work in Russia. In 2022, remittance patterns were significantly influenced by geopolitical events, particularly the conflict in Ukraine and the subsequent international sanctions imposed on Russia. These developments led to disruptions in traditional remittance channels, prompting a shift towards alternative methods such as cryptocurrencies and informal transfer systems.

The CBR has acknowledged challenges in accurately tracking remittance flows due to these shifts and the evolving geopolitical landscape. Consequently, while preliminary estimates suggest a decline in formal remittance volumes from Russia to other Eurasian countries in 2022, precise figures are pending further analysis.

World Bank estimates for 2023 show declines in remittances to most of Eurasia where figures are available. This decrease was primarily due to reduced transfers from Russia to several countries, as well as the economic impacts stemming from the Russian invasion of Ukraine. Only Georgia saw an increase in remittance inflows, up by 2.47%. Azerbaijan, Kazakhstan, and Armenia saw the highest percentage declines in remittance inflows, at respective rates of 51.57%, 36.83%, and 28.65%.

The key role of Russia was emphasized by CBR, the Russian central bank, which said that remittances from Russia declined from $9.48 billion in 2018 to $7.54 billion in 2019. According to the World Bank, excluding remittances made by Zoloyata Korona and other bank payment agents, remittances fell again to $9.83 billion in 2020 from $10.43 billion in 2019.

1.5 - Remittance Inflows in Eurasia
($m)as a share of GDP (2021)as a share of GDP (2022)as a share of GDP (2023)20192020202120222023eGR 22/23CAGR 5Y
Russia0.5%0.1%0.1%10,432.59,915.09,646.93,300.52,548.7-22.78%-22.79%
Ukraine9.0%10.6%8.4%15,788.015,213.018,060.017,093.014,967.0-12.44%0.37%
Uzbekistan13.3%20.8%13.9%8,545.87,083.79,276.816,735.714,168.9-15.34%13.24%
Kyrgyz Republic31.9%27.9%20.4%2,410.52,422.82,792.53,050.02,850.0-6.56%1.17%
Tajikistan32.7%50.9%38.4%2,321.92,186.82,921.75,345.54,633.8-13.32%16.24%
Georgia14.2%16.7%13.7%2,258.22,109.72,643.94,100.04,201.32.47%15.61%
Moldova15.5%14.1%12.2%1,909.61,876.52,119.32,037.42,012.4-1.23%1.83%
Armenia11.2%10.4%6.0%1,528.01,327.01,556.82,034.81,451.8-28.65%-0.49%
Belarus1.7%2.0%1.8%1,418.81,013.71,150.01,465.11,260.6-13.96%-2.70%
Azerbaijan2.8%5.0%2.6%1,275.21,403.11,526.63,950.01,912.8-51.57%9.31%
Kazakhstan0.2%0.2%0.1%506.1374.4309.9480.8303.7-36.83%-13.25%
Turkmenistan0.0%0.0%0.0%2.02.01.21.01.00.00%-12.94%
Source: World Bank.

Given that governments are generally aware of the advantages of replacing cash with electronic payments, the general economic and political environment is favourable for further development of retail bank and card payments across Eurasia. In most countries, retailers are proving ready to step up card acceptance provided the commercial terms are right.

In addition, banks, merchants and consumers are embracing new internet- and mobile phone-based banking and payment channels. In Russia, for example, large banks are reducing branch networks and expanding remote banking facilities, with adoption by customers encouraged by means of pricing incentives as well as convenience factors.

According to the CBR, the number of Russian accounts with remote access for customers rose to 350.02 million in 2022 from 314.07 million in 2021, with most of the growth in those accessible via the internet or mobile phones. Armenia, Azerbaijan, and Uzbekistan are actively pursuing internet and mobile banking, but are less advanced than Russia.

Greater use of cards by individuals will depend on the same considerations of convenience and speed seen in more developed countries. The spread of card-based salary/payroll contracts has helped popularise card use, and in most of the region consumers show greater willingness to hold cash in their banking accounts rather than withdrawing funds as soon as they are deposited. Sound economic policy management, avoidance of banking crises and guarantees for deposits remain fundamental to the further take-up of card and cashless payments.

National Card Schemes in Eurasia

Most countries in the region have followed the example of western Europe and launched or attempted to launch a unified interbank card scheme, usually combined with a national card processing centre.

State support is necessary for the development of national card schemes, but support from the banks, whether voluntary or not, is required as well.

Based on latest results, the best supported (both by the banks and government) are the schemes in Belarus (BelKart), Russia (MIR), Ukraine (PROSTIR), and Uzbekistan (Uzkart).

Over 2022 and 2023, some domestic schemes like Elcard in Kyrgyz Republic and Altyn card in Kazakhstan have seen a resurgence in numbers and usage, due to government and public sector efforts to migrate functions like payroll payments, social benefit disbursements, and other public sector purposes into domestic card schemes, as part of non-cash and electronic payment initiatives.

1.6 - National Interbank Card Schemes in Eurasia (2023)
CountrySchemeStatus
ArmeniaArCaDominant domestic card scheme, new: co-badged MIR
22.88% of all cards
AzerbaijanAzeriCardissued by International Bank of Azerbaijan:
around 600,000 AzeriCards in circulation.
BelarusBelKartDominant domestic card scheme, 33.79% of all cards
from 2014: co-badged Maestro
GeorgiaPAY issued by Liberty Bank, <15% of all cards
KazakhstanKazCardDefunct due to lack of bank support
Altyn Card2% of all cards
Kyrgyz RepublicElcard (Elkart)Elcard: 50.40% of all cards; new: co-bagded UnionPay
Zolotaya KoronaZolotaya Korona: 1.34% of all cards; co-badged: AlaiCard
Moldova---MoldCard system phased out.
RussiaMIRdomestic card scheme; Jan 2024: 287.3 million cards
co-badged: Mastercard, VISA, JCB, or UnionPay
Zolotaya KoronaMoney transfer cards in CIS region
UkrainePROSTIRdomestic card scheme; 2023: 460,000 cards
supported by 51 banks
UkrKartlocal card scheme; 2021: 2.5 million cards
co-badged: Maestro; likely: migration to PROSTIR
UzbekistanUzkartRollout of contactless EMV technology continued:
32 participating banks
Note: domestic card schemes gain momentum in the Eurasian countries.
Source: Yearbooks research.

ArCa – In Armenia, the central bank is the majority shareholder in ArCa and tries to ensure that all the major banks participate. However, from 2013, ArCa’s dominance slipped in the face of substantial VISA and Mastercard issuance.

ArCa is Armenia’s national payment system, enabling secure transactions for credit, debit and prepaid cards, supporting payments online and in-store. Established in 2000 by the Central Bank of Armenia and commercial banks, ArCa introduced its unified payment card system in 2001.

Recently, Armenian Card introduced ArCa Pay, an innovative platform for instant transfers between clients of Armenian banks and payment companies. Launched on November 8, 2024, ArCa Pay allows customers of participating banks to make instant transfers using only the recipient’s phone number.

Key features of ArCa Pay include:

  1. Fast and secure transfers between bank clients
  2. Lower transaction fees compared to traditional card-to-card transfers
  3. Ability to receive funds into current accounts, cards, or other designated accounts

As of February 2025, Ameriabank, Evocabank, and Converse Bank have integrated with the ArCa Pay system, with more banks and payment companies expected to join in the near future.

ArCa also offers various card products, such as ArCa Classic, which allows payments and cash withdrawals through local banks in Armenia. These cards are typically issued quickly, often within 2 business days of application.

BelKart – In Belarus, the banking sector is generally state dominated, and government drove adoption of BelKart by a presidential decree of 2006 which required salary payments to state employees to be made to BelKart salary cards. From 2014, Belkart cards could be co-badged Maestro. The number of BelKart cards has declined steadily since 2017.

Belkart Pay is a mobile application for contactless payments using smartphones in Belarus. It allows users to make payments at terminals that accept contactless Belkart cards. The app is available for devices running Android 6.0 or higher with NFC technology support

Key features of Belkart Pay include:

  1. Contactless payments without the need for physical cards or cash
  2. Offline functionality, allowing up to 30 transactions without an internet connection
  3. Support for multiple Belkart cards from different banks in one app
  4. Enhanced security measures, including tokenization of card details
  5. Integration with the Sphere Belkart loyalty program

Elkart – Kyrgyz Republic’s central bank oversees implementation of the ‘State Program of Payments System Development,’ in which Elkart is a key component. As with Armenia, however, Elkart faces challenges as Kyrgyz banks step up international card issuance. From 2016, Elkart cards can be co-badged UnionPay. Elkart numbers have risen significantly due to government non-cash migration efforts, and the number of Elkart transactions rose by 83.5% in 2022.

Elkart is the national payment system of the Kyrgyz Republic, offering affordable and reliable banking products for non-cash transactions, salary payments, pensions, and allowances. The system has seen significant growth in recent years, with the total number of issued bank payment cards increasing from 2.4 million in 2018 to over 5.2 million by the end of 2022.

Key Features and Developments

Recent Challenges

Despite its growth, the Elkart system has faced some challenges:

KazCard – In Kazakhstan, the government launched an ambitious scheme, KazCard, linked to a national processing centre, but bank support was lacking, and the scheme has been abandoned. Another domestic card branded Altyn card has gained traction in recent years, particularly in 2020 due to government efforts to increase their usage for payroll and social benefit payments.

KazCard was introduced as Kazakhstan’s national payment card by Kazpost JSC on January 12, 2005. It was designed to be an efficient payment instrument for making cashless payments within the country, targeting various levels of the population and covering small payments in retail trade.

Key features of KazCard include:

  1. Multifunctionality: The card can store various payment and non-payment applications.
  2. Microprocessor: KazCard contains a multifunctional microprocessor that can store owner information such as TIN, SIC, passport data, and driving license number.
  3. Offline and online payments: The card allows transactions in both offline and online modes.
  4. Cost-effective: It was designed to minimize costs for mass payments and reduce dependence on telecommunication quality for trade points.

KazCard was processed using the WAY4 processing system, which provided full control over fund limits for offline payments. The card’s balance and offline limit were automatically synchronized, making the same amount available for both online and offline transactions.

Kazpost JSC planned to leverage its extensive branch network to support KazCard, with plans to expand the network of cash dispensers and POS-terminals for cash withdrawals and service payments.

The introduction of KazCard was seen as a significant step towards implementing the National Payment Card System in Kazakhstan, aiming to expand cashless payments in the retail sector and provide banks and businesses with a cost-effective solution for small-value transactions.

UzKart – Central Bank of Uzbekistan is responsible for promoting a unified payment system and has ensured that Uzkart remains dominant, accounting for the branding on about 90% of cards issued. The HUMO domestic scheme, launched in 2019, counts 32 participating banks, and as of 2021, there were more than 10.6 million cards in circulation.

UzKart cards allow users to make payments at terminals in stores and service establishments, withdraw and deposit cash at ATMs, and perform online transactions. The system supports electronic payments for various services, including internet service providers like Uzonline and telephone services.

Features and Functionality

Scope and Reach

The UzKart national payment system includes 28 participating banks and has issued more than 8.5 million cards. This widespread adoption indicates its significance in Uzbekistan’s financial ecosystem.

Recent Developments

As of February 2025, the Payment Center of the Central Bank of Uzbekistan has taken over the processing of UzKart payment system transactions. This change may lead to improved efficiency and security in UzKart payments.

UzKart has also partnered with BPC Banking Technologies to enhance its international payments infrastructure. This collaboration aims to expand the system’s capabilities and potentially facilitate cross-border transactions for UzKart users.

PROSTIR – In Ukraine, NSMEP, the National System of Mass Electronic Payments, was launched by the central bank in 1998. For most of its existence, NSMEP received only erratic official support and was largely ignored by the private banking sector, but this began to change in 2014 when PrivatBank and other large commercial banks joined the scheme. From 2016, NSMEP cards are re-branded as PROSTIR cards. The central bank, NBU, and the Ukrainian bank have committed supporting the domestic PROSTIR card system.

PROSTIR is Ukraine’s national card payment system, and provides a range of financial services for Ukrainian citizens and businesses:

  1. Payment Cards: PROSTIR issues payment cards that can be used for various transactions within Ukraine, including retail payments, online purchases, cash withdrawals, and person-to-person transfers.
  2. Widespread Acceptance: PROSTIR cards are accepted at over 350,000 trading terminals across Ukraine. All Ukrainian banks are expected to join the PROSTIR system, ensuring 100% acceptance of PROSTIR cards at terminals nationwide.
  3. Types of Cards:
    • Universal cards for salary payments and general use
    • Pension and social transfer cards
    • Co-badged cards for international use
    • Cards with ID functionality (e.g., pension certificates)
  4. Fees: As of May 1, 2022, PROSTIR charges a 0.3% interchange fee for cashless transactions, which is lower than pre-war rates. However, transactions with registered charities, social services, and war bond purchases remain at 0% interchange.
  5. International Partnerships: PROSTIR has partnered with UnionPay International to offer co-badged cards, allowing users to make payments both within Ukraine and internationally.

PROSTIR aims to provide convenient and secure financial services to Ukrainian citizens while promoting national security and independence in the financial sector.

MIR – Russia has decided to develop a domestic scheme, drawing on the example of China UnionPay, in response to western financial sanctions and with a view to reducing reliance on VISA and Mastercard. From 2016, the new domestic card system, MIR, is strongly supported by the Central Bank of Russia and 35 large banks. MIR cards can be co-badged with one of the brands of Mastercard, VISA, JCB, or UnionPay. In 2023, there were 287.3 million MIR cards in circulation, all of which are contactless enabled. They account for 56% of all domestic card transactions in Russia and 55% of debit and credit card issuance. The system has become increasingly popular within Russia, with 3.5 billion payments issued using Mir in 2020, a 75% increase from the previous year.

Historically, Sberbank announced ambitious plans in 2006 to develop Sbercard as a national interbank payments system, with a goal, never achieved, of 50 million Sbercard cards by 2010. However, Sbercard was side-lined as Sberbank pushed ahead with Mastercard and VISA card issuance.

Sberbank then joined hands with the regional players AK Bars Bank and Uralsib Bank to launch and develop Universal Electronic Card (UEC), primarily as an e-ID card for access to state services, but also with a payment function. The project was approved in 2010 and was expected to deliver cards to all citizens, at a cost estimated by Sberbank at RUB 150 billion ($50 billion). However, by mid-2013, issuance was running late. In the light of the new MIR card scheme, the UEC scheme was phased out in December 2016.

International Acceptance

While primarily used in Russia, Mir has been expanding its international presence:

However, the system has faced challenges in some countries due to sanctions. For example, Turkey, a popular tourist destination for Russians, has restricted servicing Mir cards.

Future Developments

Russia is actively pursuing payment solutions to expand Mir’s reach. The country is considering partnerships with other payment systems, such as China’s UnionPay, to replace Visa and Mastercard for international transactions. Additionally, Russia and India have expressed interest in continuing dialogue on accepting RuPay and Mir cards within their national payment infrastructures.

Despite these efforts, as of March 2024, Samsung Pay announced it would stop working with Russia’s Mir payment cards from April 3, 2024, indicating ongoing challenges for the system’s international integration.

Investment by Western Banks

A wave of investment by western banks over the 10 years or so up to the time of the global credit crunch in 2008-9 has been followed by the disposal of some of the banks thus acquired, particularly in Russia and Ukraine. HSBC, Barclays, BNP Paribas, Santander, Svenska Handelsbanken, Swedbank and Rabobank have been among those to leave or substantially scale back, some taking material losses in the process.

Among the most significant departures have been Barclays, which sold Expobank in Russia, which it acquired for $745 million, for a nominal sum; and KBC, which fared better, selling Absolut Bank in Russia for €1.3 billion compared with the €761 million purchase price.

UniCredit, Raiffeisen Bank International and Société Générale continue to be the biggest western banking investors. All of them insisted up to 2013 that they were committed to their remaining banks, but intentions changed during the course of the year.

In May 2013, UniCredit sold ATF Bank, its Kazakhstan bank, to a local energy producer, KazNitrogenGaz for a reported $500 million. UniCredit’s departure, to focus on its CEE banks, left Kazakhstan without any substantial western bank presence. It also precipitated a change of control in ATF’s subsidiary, UniCredit Bank, in Kyrgyz Republic, to become owned by Kyrgyz investors. UniCredit in Kyrgyyz Republic was subsequently renamed Optima Bank in 2013.

Even without ATF, UniCredit had the biggest western banking presence in Eurasia, with total assets of $33 billion in its banks in Russia and Ukraine as of end-2013. However, UniCredit indicated in October 2013 that it was considering the sale of its Ukrainian bank. Ukrsotsbank, its Ukrainian banking entity, was sold to Alfa Group’s ABH Holding in 2016. In October 2019 Ukrsotsbank was fully merged with Alfa-Bank (Ukraine).

In early 2022, UniCredit announced plans to exit its banking operations Russia, stating it had received several offers from Russian bank institutions to buy its local subsidiary. The ECB had restricted UniCredit from issuing new loans and accepting new term deposits from June 2023. The management has indicated plans for a full exit from Russia, emphasising the need for favourable terms. By 2024, UniCredit is yet to exit Russia partly due to its inability to secure a buyer despite extending the offer to non-local investors but also due to Vladimir Putin’s restriction on the sale of Russian Banks.

In September 2013, Raiffeisen excluded its Ukraine and Belarus operations from its six core markets: Austria, Russia, Poland, Slovakia, the Czech Republic, and Romania. In March 2014, Raiffeisen said interested parties were carrying out due diligence on Aval, its Ukraine bank, however, in 2015 the EBRD acquired a 30% stake in Aval and in June 2021 it was formally renamed Raiffeisen Bank. Raiffeisen also owns Priorbank, No. 7 in Belarus, as well as its top 10-ranked Russian operations.

In March 2022, Raiffeisen announced it was considering exiting Russia and was assessing strategic options. This has been delayed due to the need for the approval of Russia’s central bank, the Finance Ministry, and even Vladimir Putin, Russia’s president. In April 2023, RBI Group announced that it would continue to progress potential transactions which would result in the sale or spin-off of Raiffeisenbank Russia and deconsolidation of Raiffeisenbank Russia from the RBI Group.

Société Générale lacked the scale of UniCredit or Raiffeisen in Eurasia, but had a major bank presence in Russia, where it ranked ninth as its local interests had been merged into Rosbank, with $27.2 billion of assets at end-2013. SocGen had also invested in Georgia, where it owned 60% of Bank Republic before selling it in 2016, and in Moldova’s Mobiasbanca, which it sold in 2019.

Crédit Agricole is present in Armenia with ACBA-Crédit Agricole and in Ukraine, where it purchased Index Bank. BNP Paribas has acquired Ukrsibbank in Ukraine, but it has only a small presence in Russia and nothing in the rest of the region. In April 2022, Société Générale ceased its activities in Russia and signed an agreement to sell Rosbank to Interros Capital, the previous shareholder of Rosbank. The sale was completed in May 2022.

In August 2022, Citibank announced it would close its consumer and commercial banking businesses in Russia, having first announced plans in April 2021 to leave the retail business as part of a broader departure from some overseas markets. It expanded plans to exit in early 2022 to include local commercial banking after Russia’s invasion of Ukraine. In May 2023, Citibank signed an agreement with Uralsib Bank to transfer its credit card portfolio to the Russian lender, subject to customer approval.

There is negligible investment by German banks, though Commerzbank held talks about buying Belinvestbank in Belarus and bought Bank Forum in Ukraine, which it subsequently sold. ProCredit Bank in Georgia, Moldova and Ukraine are three of the 12 members of the ProCredit Group in Europe, founded in Germany as Internationale Micro Investitionen in 1998 by the development consultancy IPC.

In Moldova, Eximbank is wholly owned by Intesa Sanpaolo from Italy.

HSBC has retail operations in Armenia, focusing on high-net-worth individuals. Although it purchased the retail operations of RBS Kazakhstan in June 2010, HSBC sold all its Kazakh interests to Halyk Bank in February 2014. HSBC also withdrew from retail operations in Georgia in 2009 to concentrate on corporate accounts.

Turkish banks are prominent investors in Azerbaijan, with Yapi Kredi, in which UniCredit is a strategic shareholder, setting up a subsidiary in 1998. Azer-Turk Bank was established by T.C. Ziraat Bank and Agrarcredit of Azerbaijan in 1995; T.C. Ziraat Bank retains a 12.37% interest. NAB Holding, a Turkish conglomerate, is a founder shareholder in Bank of Baku, a progressive mid-sized bank which was the first in Azerbaijan to focus on retail banking.

T.C. Ziraat also has a presence in Georgia. In Kyrgyz Republic, Demir Kyrgyz International Bank (DKIB) is 92%-owned by Turkish entrepreneur Halit Cingillioglu with HCBG Holding owning 7.5%.

Recent updates and further details of the status of western bank investments in Russia and Ukraine are summarised in the respective country profiles.

Cross-border Investment by Eurasian Banks

The Moscow-based, state-controlled VTB Group has a strategy of developing banking operations throughout Eurasia, with the aim of becoming one of the top five banks in each country. As of 2021, VTB Group had over 20 credit institutions in its portfolio and reported a total of 18 million active clients, including in Armenia, Azerbaijan, Belarus, Georgia, and Kazakhstan. VTB purchased 51% of AF-Bank in Azerbaijan in 2008 and was granted a banking licence in Kazakhstan in 2009.

Following the Russian invasion of Ukraine in February 2022, VTB Bank Georgia was sanctioned by international organisations and the National Bank of Georgia, which led to the bank offloading its consumer loans and deposit portfolios to Basisbank of Georgia.

Kazakhstan’s BTA, previously known as Bank TuranAlem (BTA), was the most active non-Russian bank in expanding cross-border in Eurasia. Before the credit crunch and its subsequent state rescue, Bank TuranAlem established operations in Armenia, Belarus, Georgia, Russia, Turkey and Ukraine.

Sberbank followed VTB in investing in banks outside Russia. Though it has been linked with potential acquisitions such as BTA in Kazakhstan, Sberbank opted for organic growth backed by its massive balance sheet. Sberbank’s wholly owned subsidiary in Kazakhstan became the country’s fifth-biggest bank in 2013, and as of 2021 ranked second in terms of assets.

In May 2022, following the Russian invasion of Ukraine, Ukraine’s National Security and Defense Council seized the assets belonging to Russia and its residents, including Sberbank of Ukraine and 99.8% of shares in Prominvestbank (PIB) owned by Russian development corporation VEB. Ukraine also announced the seizure of other financial assets of the subsidiaries of Russian banks, with the exception of UAH 3 billion belonging to the International Reserve Bank that will be used to meet claims from creditors.

Sberbank entered the Belarus market with the purchase of BPS-Bank, which as of 2023 was the country’s fifth biggest, while Sberbank Ukraine (SBU) was a remarkable growth story up until 2022 when the bank exited Ukraine due to the invasion. SBU was ranked 8th largest in terms of assets in Ukraine at end-2021.

In a ground-breaking move in June 2012, Sberbank took advantage of the break-up of Dexia to buy 99.85% of Denizbank, Turkey’s sixth-largest private bank, for TL6.5 billion ($3.6 billion). Earlier, Sberbank made its first investment in a European bank in 2011, when it acquired Volksbanken International, responsible for the eastern European retail banking networks of Austria’s Volksbanken.

As well as VTB, other Russian banks have become important players in Belarus, including Gazprom’s Belgazprombank and Bank Moskva-Minsk, owned by Bank of Moscow. Alfa-Bank and Vnesheconombank are also present. The share of the top 10 Belarus banking assets controlled by Russian banks was 14.19% as at end-2023.

Halyk from Kazakhstan has established operations in Georgia, as has the International Bank of Azerbaijan and ProCreditBank.

Three Eurasian banks set up significant Russian operations. From Azerbaijan, IBA has developed a subsidiary bank, International Bank of Azerbaijan – Moscow, the first substantial foreign subsidiary of any Azeri bank, while Kazkommertsbank established Moskommertsbank in Moscow in 2001. Kazkommertsbank merged with Halyk Bank in 2018.

Ukraine’s PrivatBank developed a Russian subsidiary, Moscomprivatbank, which was among Russia’s top 100 banks. In 2014, PrivatBank sold Moscomprivatbank to B&N Bank.

IBA also owns 75% of International Bank of Azerbaijan – Georgia.

National Bank of Uzbekistan has a Moscow affiliate, Asia-Invest Bank, which is one of the top 200 Russian banks.

Recent updates and further details of the status of cross-border Eurasian bank investments are summarised in the respective country profiles.

Other Private Investment

Middle East investors play a relatively modest part in Eurasian banking. Alnair, an Abu Dhabi-based private equity group, acquired 25.2% of Kazkommertsbank in early 2009. A controlling stake of 65.2% in Georgia’s People’s Bank was sold to RAK Georgia Holding, controlled by Gulf Arab interests, in 2009, but subsequently sold on to Georgian and Romania interests (see Georgia profile).

There is relatively little investment by Asian banks. BasisBank, a Georgian-owned bank in which EBRD held 15%, was sold to China’s Hualing Group in June 2012. Hualing acquired a shareholding of 90% in BasisBank, with EBRD and Zurab Tsikhistavi, the bank’s founder, retaining a minority interest. The transaction was reported to be the first acquisition of a foreign commercial bank by a Chinese private sector group.

Recent updates and further details of the status of private investments are summarised in the respective country profiles.

Multilateral Banks and Agencies

European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC), the World Bank’s equity investment agency, have invested in a large number of banks across the region.

Other official organisations with a presence are FMO (Netherlands Development Finance Company), the German agency, Deutsche Investitions- und Entwicklungsgesellschaft (DEG), a member of KfW banking group, and Sparkassen International Development Trust, part of the Sparkassen-Finanzgruppe.

Recent updates and further details of the status of multilateral banks and agencies investments are summarised in the respective country profiles.

Impact of the Financial Crisis

The financial crisis of 2008-2009 had particular impact on the banking systems of Ukraine and Kazakhstan, with governments and central banks required to intervene on a large scale. By 2015, recovery had been slow in both countries but had accelerated towards the end of the decade, until the arrival of COVID-19 up-ended economies across the world.

In Ukraine, several major banks were taken into administration under National Bank of Ukraine, the central bank, during 2008-2009. Six Ukrainian banks which required recapitalisation – Bank Finance and Credit, Bank Nadra, Imexbank, Rodovid Bank, UkrGasBank and UkrPromBank – all ranked among the 30 largest Ukrainian banks by total assets in October 2008.

With Kazakh banks owing $45 billion in foreign debt, Samruk-Kazyna, the Kazakh government’s ‘National Wealth Fund’ (and holding company for state-owned enterprises), had to make $10 billion available to support the banks, including an injection of $4 billion into the biggest banks. Samruk-Kazyna subsequently took control of BTA (previously Bank TuranAlem), Alliance Bank and Temirbank.

In late 2013, Samruk-Kazyna succeeded in privatising the bulk of its bank holdings. It sold BTA to Kazkom and to Kenges Rakishev, a Kazakh entrepreneur. At the same time, Samruk-Kazyna sold its 80% of Temirbank and 16% of its stake in Alliance Bank, retaining 51%, to Bulat Utemuratov, another Kazakh entrepreneur.

Compared with KZT 322 billion ($2.2 billion) invested in the rescued banks in 2009, Samruk-Kazyna expected to recover about KZT 270 billion ($1.5 billion) once its sales were completed.

As at January 1 2014, the banking sector overall remained under stress and making little progress towards recovery. The banks reported 31.4% of total loans overdue by 90 days, compared with 29.8% at end-2013. BTA, now under the control of Kazkom, was in the worst condition, with 86.5% of loans overdue by more than 90 days, followed by Alliance on 49.8%. All the banks, however, reported positive equity positions.

In Russia, the strength of the economy and support from Central Bank of Russia and the Deposit Insurance Agency helped deal with any bank problems. Public and private banks were lined up to take over failing banks, most of which were relatively small.

The biggest casualties were Svyaz-Bank and Globexbank, which were taken over by the state-owned development bank Vnesheconombank with funds from the central bank, which provided $2.5 billion for Svyaz-Bank and RUB 87 billion for Globexbank. Both banks are systemically important and are now reported to be functioning normally. Svyaz-Bank services 14 million accounts used to pay pensions by Federal Post of Russia, while Globexbank focuses on individual retail accounts.

From the private sector, Alfa-Bank, the largest private bank in Russia, bought a controlling stake in Severnaya Kazna, one of the leading banks in the Urals region, in cooperation with the authorities.

Mergers and Acquisitions in Eurasian Banks 

Mergers and Acquisitions in Eurasian Banking
Date Country Merger/Acquisition
2024
March Georgia Bank of Georgia completed the acquisition of Ameriabank
2023
July Ukraine Ukraine’s Central Bank nationalised Sense Bank (formerly Alfa Bank)
June Uzbekistan OTP Bank acquired a 73.71% stake in Ipoteka Bank
2022
December Russia VTB Bank Russia acquired 100% of Otkritie Bank
May Kazakhstan Bank CenterCredit acquired of 100% of the stocks of Alfa Bank Kazakhstan
March Georgia Basisbank and Liberty Bank acquired loan portfolio of VTB Bank
March Armenia VTB-Armenia Bank transferred part of its retail portfolio to Ardshinbank
January Russia Asian-Pacific Bank acquired by Pioneer Capital Invest for RUB 14 billion
2021
December Belarus Alfa-Bank acquired 99.98% of shares of Belarusian bank Fransabank
September Azerbaijan Ownership of IBA transferred to Azerbaijan Investment Holding
July Georgia Credo Bank acquires FINCA Bank Georgia
2020
December Kazakhstan Jysan Bank acquires ATF Bank
August Kazakhstan Forte Bank sells Bank Kassa Nova
April Belarus Cypriot company Beristore Holdings acquires Paritetbank
April Uzbekistan TBC Bank receives banking licence
January Kyrgyz Republic Bakai Bank acquires BTA Bank
2019
October Ukraine Alfa-Bank acquires Ukrsotsbank
October Kyrgyz Republic Rosinbank renamed Keremet Bank
July Moldova OTP Bank acquires Mobiasbanca from SocGen
March Moldova Doverie-Invest acquires Moldinconbank
February Kazakhstan First Heartland Securities buys Tsesnabank
January Belarus Bank Moskva-Minsk rebranded Bank Dabrabyt
January Russia Otkritie Bank and Binbank merged
2018
December Ukraine VTB Bank liquidated
January Kazakhstan Merger of Kazkommertsbank into Halyk Bank in H1 2018.
January Russia Merger of VTB Bank and VTB24 Bank.
2017
December Azerbaijan Demirbank liquidated
October Georgia European Financial Group BV (EFG) acquired a 76.64% stake in Liberty Bank.
September Georgia TBC Bank bought Bank Republic from Société Générale (F), which now has a 5.38% stake in TBC Bank.
August 2017 Ukraine IndustrialBank absorbed Express-Bank.
July Kyrgyz Republic Sawada Holdings (JPN) acquired 52.90% of Kyrgyzkommertsbank shares during the additional issue of KKB shares.
July Kazakhstan Halyk Bank acquired 96.81% of Kazkommertsbank.
June Moldova Intesa Sanpaolo Group (I) took over Eximbank from Gruppo Veneto Banca (I) for one euro.
March/April Kazakhstan Tsesna Finance Holding acquired a 67.17% stake in Bank CenterCredit (BCC).
January Ukraine PrivatBank (UA) became a state-owned bank.
2016
September Georgia TBC Bank bought 93.64% of Bank Republic from Société Générale Group (F).
August Kazakhstan Kazkommertsbank owned BTA (Bank Turan Alem) sold its subsidiary BTA Bank Armenia to an Armenian investor.
May Ukraine NSMEP rebranded as PROSTIR (Ukrainian Payments Area.
March Ukraine RBI Group (A) sold a 30% stake in Raiffeisen Bank Aval to the European Bank for Reconstruction & Development.
February Kazakhstan / Russia Bank Center Credit (BCC) sold its Russian subsidiary, Bank BCC-Moscow, to private Russian investors.
February Ukraine BNP Paribas (F) sold a 25% stake in UkrSibBank to the European Bank for Reconstruction & Development. EBRD’s shares increased to 40%. BNP Paribas retained 59.99%.
January Ukraine UniCredit Group (I) sold its Subsidiary UkrSotsBank to Alfa Bank Holding (RUS) in exchange for a 9.9% stake in ABHH.
2015
December Armenia Inecobank has acquired ProCredit Bank financed with equity investments by the EBRD (22.7% stake in merged Inecobank), supported by a $20 million loan from IFC.
May Kazakhstan Merger of Alliance Bank with ForteBank and Temirbank. The enlarged ForteBank is now the seventh largest bank in Kazakhstan by total assets.
February Kyrgyz Republic Kazkommertsbank (KZ) sold 95.75% of its shares in its subsidiary Kazkommertsbank-Kyrgyzstan (KG) to natural person Mr. Mamakeev K.M. Then.
2014
December Georgia Bank of Georgia acquired Privatbank Georgia, the subsidiary of Privatbank (UA) in Georgia.
October Russia Alfa-Bank acquires 88% of the distressed Baltiyskiy Bank.
May Russia Otkritie Holdings announces plans to merge Otkritie Bank with Khanty-Mansiysk Bank.
April Ukraine Following the annexation of Crimea, Russia’s central bank closes Ukrainian banks and authorizes operations by St. Petersburg-based Bank Rossiya.
April Ukraine PrivatBank joins NSMEP, the domestic scheme, becoming the first major private bank member.
February Kazakhstan HSBC sells its Kazakhstan interests to Halyk Bank. HSBC Kazakhstan became rebranded as Altyn Bank.
2013
December Kazakhstan Samruk-Kazyna sells most of its bank holdings – BTA to Kazkom and to Kenges Rakishev, a Kazakh entrepreneur and 80% of Temirbank and 16% of its stake in Alliance Bank to Bulat Utemuratov, another Kazakh entrepreneur.
October Ukraine UniCredit says it is considering the sale of its Ukrainian bank.
October Russia GE Money Bank is sold to Sovcombank.
September Ukraine Raiffeisen says it will focus in future on six core markets; Ukraine is not one of them.
July Ukraine Delta Bank buys Astra Bank, the Ukrainian subsidiary of Alpha Bank of Greece, for €82 million.
April Kyrgyz Republic UniCredit Bank, formerly owned by ATF Bank, is relaunched as Optima Bank under Kyrgyz owners.
May Kazakhstan UniCredit sells ATF Bank to the energy group KazNitrogenGaz.
April Kyrgyz Republic DEBRA, the Kyrgyz government’s Agency for Reorganisation of Banks and Debt Restructuring, sells 90% of Zalkar Bank to Investment and Trade Business Holding, a Russian company.
April Ukraine Swedbank completes sale of its Ukrainian subsidiary to Mykola Lahun, a shareholder in Delta Bank and owner of Kreditprombank; Swedbank Ukraine is renamed Omega Bank.
January Russia Sberbank buys 75% of Yandex.Money and announces JV.
2012
December Russia KBC agrees the sale of Absolut Bank to Russian pension funds.
December Ukraine Erste sells its Ukrainian bank to Fidobank, controlled by Oleksandr Adarych.
September Russia Sberbank finalizes terms of POS finance joint venture with BNP Paribas/Cetelem.
August Russia PPF Group sells its 26.5% stake in Nomos-Bank to Otkritie Financial Corporation.
June Georgia BasisBank, in which EBRD held 15%, is sold to China’s Hualing Group
June Ukraine Smart Holding, owned by Vadym Novinsky, says it is in talks with Commerzbank to buy Bank Forum.
June Russia Sberbank buys 99.85% of Denizbank, Turkey’s sixth-largest private bank, for TL6.5 billion ($3.6 billion) from Dexia.
February Russia VTB lifts its stake in TransCreditBank to 77.9%.
2011
November Ukraine SEB sells its Ukrainian retail business to Ukrainian-owned Eurobank.
October Russia Barclays completes sale of Russian retail banking interests.
August Russia Raiffeisen buys retail banking assets of Swedbank.
July Ukraine Nadra Bank now 90%-owned by Centragas, the Austrian holding company of oligarch Dmytro Firtash.
July Russia SocGen completes the consolidation of its Russian banking interests under 82.4%-owned Rosbank.
July Russia VTB announces the purchase of TransCreditBank from Russia Railways.
June Ukraine Platinum Bank completes the purchase of Home Credit Bank.
June Russia HSBC announces the sale of its retail interests to Citibank.
March Russia VTB says it plans to acquire a controlling shareholding in Bank of Moscow.
February Russia Barclays announces plans to sell Expobank, acquired for $745 million in 2008.
February Ukraine Bank of Georgia announces sale of 80% of its Ukraine subsidiary to local investors.
January Ukraine Investors led by Troika agree to buy VAB Bank.
2010
December Russia Orient Express Bank agrees to buy Santander’s operations.
July Kyrgyz Republic Asia Universal Bank is taken into central bank curatorship and later renamed Zalkar Bank.
June Kazakhstan HSBC to acquire the retail banking assets of RBS Kazakhstan for up to $52 million.
June Russia Barclays to sell half its retail network to Renaissance Credit.
May Ukraine Nadra Bank, in administration and scheduled to be sold to local businessmen, instead is to be recapitalised by state and oligarch Dmytro Firtash.
May Russia Norway’s Spare Bank 1 buys 75% of St Petersburg-based NorthWestern Alliance Bank.
May Russia KBC of Belgium announces plans to sell its 95%-owned Absolut Bank.
March Ukraine/

Germany

 Commerzbank acquires an additional 26.25% stake in Bank Forum, increasing its stake to around 89.3%.
March Georgia People’s Bank is renamed Liberty Bank, following its acquisition by former PM Lado Gurgenidze and Romanian oligarch Dinu Patriciu.
February Kazakhstan India’s Punjab National Bank takes a controlling stake in Danabank, ranked 25th in Kazakhstan.
February Russia SocGen announces plans to merge all its Russian financial companies – Rusfinance, Delta and BSGV – into a single company under Rosbank.
March Korea/-Kazakhstan Kookmin Bank of Korea lifts its stake in Bank CenterCredit to 42%.
2009
December Belarus/Russia Sberbank and BPS-Bank agree terms for Sberbank to buy 93.27% of BPS-Bank (now BPS-Sberbank).
December Russia Intesa Sanpaolo completes merger with KMB Bank, trading as ZAO Banca Intesa; Intesa Sanpaolo owns 86.75% and EBRD 13.25%.
November Russia EBRD announces plans to acquire 11.75% in Promsvyazbank, Russia’s third largest locally-owned private bank, the largest EBRD investment to date in the capital of a Russian bank.
September Georgia Georgian and Romanian interests buy control of People’s Bank from Gulf Arab interests.
August Russia MDM Bank and URSA Bank complete merger, creating the largest privately-owned bank in Russia by retail term deposits and retail loans.
August Ukraine EBRD and KfW’s Deutsche Investitions- und Entwicklungsgesellschaft acquire stake in MegaBank.
August Tajikstan EBRD acquires 25% plus one share in Agroinvest-bank, the second-largest Tajik commercial bank.
February UAE/Georgia RAK Georgia Holding, controlled by Gulf Arab interests buys 65.2% of People’s Bank.
January Russia/-Azerbaijan VTB acquires 51% of AF-Bank.
2008
December Russia Alfa-Bank announces acquisition of a controlling interest in Sevemaya Kaza, one of the principal banks of the Urals region.
September UAE/Georgia Standard Bank is acquired by UAE investor Dhabi Group and renamed Kor Standard Bank.
August Austria/Belarus Raiffeisen International buys EBRD’s shares in Priorbank, lifting its total shareholding to 87%.
July Austria/Russia Erste Bank acquires 9.8% stake in Russian Bank Center-Invest.
June Cyprus/Russia Bank of Cyprus announces the acquisition of an

80% interest in Uniastrum Bank for €371million.
June Abu Dhabi/-Kazakhstan Abu Dhabi-based private equity group, Alnair, acquires 25.2% of Kazkommertsbank.
March Korea/-Kazakhstan Kookmin Bank of Korea announces that it will acquire a 30.0% stake in Bank CenterCredit.
March Greece/Ukraine Alpha Bank announces acquisition of 90% of the newly established Astra Bank.
March Germany/

Ukraine

 Commerzbank completes acquisition of a majority interest in Ukraine’s Bank Forum.
March UK/Russia Barclays announces acquisition of 100% of Expobank for approximately $745 million (£373 million).
February France/Russia Société Générale finalizes acquisition of a majority stake in Rosbank.
February Italy/Ukraine Intesa Sanpaolo announces agreement to acquire 100% of the share capital of Pravex Bank for approximately €504 million.
January Italy/Austria/

Ukraine

 UniCredit subsidiary BA-CA finalizes the acquisition of the majority shareholding in Ukrainian bank Ukrsotsbank.
2007
December Russia/Ukraine Sberbank acquires 100% of CJSC Bank NRB.
December Israel/Ukraine Bank Hapoalim announces the acquisition of 76% of Ukrinbank for $136 million.
November Russia Merger of Raiffeisenbank and IMPEXBANK legally concluded.
November Italy/Austria/

Kazakhstan

 UniCredit subsidiary BA-CA finalizes the acquisition of the majority shareholding in ATF Bank in Kazakhstan.
November Sweden/Ukraine SEB announces agreement to acquire 97.25% of Factorial Bank in Ukraine.
September Germany/

Ukraine

 Commerzbank announces acquisition of a majority interest in Ukraine’s Bank Forum.
July Italy/Austria/

Ukraine

 UniCredit subsidiary BA-CA signs agreement to acquire 95% of Ukrainian bank Ukrsotsbank.
June Italy/Austria/

Kazakhstan

 UniCredit subsidiary BA-CA signs agreement to acquire ATF Bank, the third largest bank in Kazakhstan.
May Belgium/Russia KBC announces agreement to acquire 2.5% of Absolut Bank from IFC taking its planned stake to 95%.  IFC plans to retain a 5% shareholding.
April Italy/Ukraine Intesa Sanpaolo’s planned purchase of Ukrsotsbank collapses due to lack of authorisation from Ukraine’s central bank.
April Belgium/Russia KBC announces agreement to acquire at least 92.5% of Absolut Bank, one of the leading independent mortgage lenders in Russia.
March Greece/Ukraine Marfin Popular Bank agrees to acquire Ukraine’s Marine Transport Bank.
February Sweden/Ukraine Swedbank announces agreement to acquire TAS-Kommerzbank, the thirteenth largest bank based on total loans in Ukraine.
January France/Moldova Société Générale announces acquisition of 70.57% of Mobiasbanca in Moldova.
2006
December Austria/Ukraine Erste Bank agrees with shareholders of Bank Prestige to acquire 100%, not 50.5% as announced in July 2006.
December Italy/Austria/

Russia

 UniCredit’s BA-CA finalizes acquisition of 19.77% of International Moscow Bank (IMB) from VTB Bank (France) SA.  BA-CA also expects to acquire HVB’s 70.26% shareholding in IMB.
November Nordic/Russia Nordea signs agreement to purchase a 75.01% stake in JSB Orgresbank in Russia for €246 million.
September France/Georgia Société Générale announces the acquisition of a 60% stake in Bank Republic, a leading bank in Georgia.
August Finland/Russia Sampo Bank closes the acquisition of Profibank in St. Petersburg.
August Germany/

Russia

 Commerzbank announces plans to take a 15.3% stake in Promsvyazbank, the 12th largest bank in Russia, with the possibility a majority position at a later date.
July Greece/Ukraine Eurobank EFG announces an agreement to acquire 99.34% of Universal Bank in Ukraine.
July Austria/Ukraine Erste Bank enters the Ukrainian market with the acquisition of a majority (50.5%) stake in Bank Prestige.
June Italy/Germany/

Finland/Russia

 UniCredit says HVB has agreed with Nordea Bank Finland to acquire a further 26.4% of ZAO International Moscow Bank (IMB), increasing HVB’s overall shareholding in IMB’s voting capital from ca. 52.9% to ca. 79.3%.
June France/Russia Société Générale announces the acquisition of a 10% minority stake in Rosbank from Interros.
June Austria/Hungary/Ukraine Raiffeisen International announces sale of 100% of Raiffeisenbank Ukraine to OTP Bank following its acquisition of Bank Aval in 2005.
April France/Ukraine BNP Paribas completes acquisition of a 51% stake in Ukrsibbank.
April Finland/Russia Sampo Bank plc announces intention to acquire Industry and Finance Bank (Profibank), a Russian bank based in St. Petersburg.
March France/Russia SocGen announces the acquisition by Rusfinance of SKT Bank, a Moscow-based specialist in car financing.
March France/Ukraine Crédit Agricole announces agreement to acquire Index Bank in Ukraine.
February Sweden/Russia SEB signs agreement to acquire PetroEnergoBank, a Russian bank based in St. Petersburg.
February Italy/Ukraine Banca Intesa announces negotiations for the acquisition of a controlling interest in Ukrosotsbank.
February Austria/Russia Raiffeisen International announces acquisition of Russian JSC Impexbank subject, which will make it the largest foreign-owned banking group in Russia.
2005
December France/Ukraine BNP Paribas announces agreement to acquire a 51% stake in Ukrsibbank, one of the top five Ukrainian banks.
September Italy/Russia Banca Intesa finalizes acquisition of a majority stake in KMB Bank.
August France/Russia Société Générale announces acquisition of 100% of mortgage lending specialist DeltaCredit Bank.
August Austria/Ukraine RZB’s listed subsidiary Raiffeisen International to acquire a 93.5% stake in Bank Aval, the second-largest Ukrainian bank, for $1 billion.
January France/Russia BNP Paribas subsidiary Cetelem terminates planned acquisition of a 50% stake in the company that controls Russian Standard Bank.
January Russia/Georgia VTB acquires 50% plus one share in UGB, the third-largest bank.
2004
August US/Russia GE Consumer Finance announces the acquisition of DeltaBank, a Moscow-based consumer bank
April Russia/Armenia VTB acquires 70% plus one share of Armsavingsbank.
Notes: mergers and acquisitions may take several months from announcement to completion (or not) and then integration. A precise merger date is therefore not always possible. In most cases, the date given above is the date of the merger announcement; table does not include some small deals.
Source: Yearbooks research.
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