MOSCOW. (Anatoly Gorev, financial analyst, for RIA Novosti) - Russia's WTO entry will be one of the hottest topics at the first CIS Banking Forum scheduled for June 21-24 in Vienna.

Financiers fear that the Russian money market might go the way of eastern Europe's, where foreign ownership of bank capital shot up to 80% or 90%, and even 100% in some cases. If so, will this trend benefit the national economy, or put it under the thumb of foreign capital?

At first glance, there are grounds for such gloomy forecasts: western banks are aggressively invading the Russian banking market. New arrivals include such big names as Societe Generale, Raiffeisen International, ICICI Bank, BNP Paribas, Citigroup, HSBC, Intesa, UniCredit and others. This year the short list may grow to include new names: Britain's third-largest bank, Barclays, and China's largest bank, Industrial & Commercial Bank of China (ICBC). Each of these expected arrivals will be symbolic in its own way. In the case of Barclays, it will be its second attempt - the British financial and credit institution operated in Russia in the mid-1990s but decamped following the August 1998 default. As for the Chinese bank, it ranks fourth in the world for market capitalization ($208.9 billion).

Nevertheless, it is highly unlikely that western or eastern banks will overrun the Russian banking market, as has happened in eastern Europe.

Despite the aggressive techniques used by foreign strategic investors, the share of foreign capital in the aggregate capital of Russian banks is not more than 18%. Since the beginning of the year it has risen by another 2%. But this growth, according to Alexei Ulyukayev, first deputy chairman of Russia's Central Bank, has been due to international portfolio investors rather than strategic investors purchasing large amounts of bank stock.

International investors played a big part in Vneshtorgbank's IPO and in Sberbank's additional issue. The result has been that 12% of Vneshtorgbank's capital is now foreign-owned, and in the case of Sberbank, more than 21%. But this is not enough to say that the two large Russian financial lenders risk becoming foreign-dominated: non-resident investors are spread thinly among their many shareholders. Foreigners are by law unable to exercise any influence either on management decisions or development strategies adopted by Vneshtorgbank or Sberbank.

These two financial giants make up the core of Russia's highly centralized banking system: 14 of the existing 1,200 banks account for about half of Russian banking capital, including 25% in Sberbank and 7% in Vneshtorgbank.

This is why a repeat in Russia of the Czech, Romanian or Slovak scenario, in which international financial groups took control of entire banking systems, is impossible. The Russian government has no intention of surrendering control over state banks either to Russian investors or, least of all, non-resident investors. Even if the newcomers from the West or East buy up most of Russia's private banks (which is unlikely), a considerable proportion of the market will remain in the hands of national banking organizations.

There is also a second reason why the eastern European scenario is unlikely to repeat itself. Experts note that when large foreign financial groups arrived in the Czech Republic, Romania and Slovakia, their national banks were heavily undercapitalized. In practical terms, this meant that the banks had nowhere to go for more capital, and therefore, no way to develop their credit business. To invite a strategic investor in the form of a leading foreign bank appeared a welcome cure in that situation. For Russian banks - at least those among the top 100 or even top 200 - the problem is less acute. At a time when banks are posting annual returns on capital of 30% to 40%, bank owners themselves are prepared to invest in their own financial organizations.

Admittedly, some Russian banks will be sold, but not en masse and not for any amount of money. Fears of an impending foreign occupation of the market are exaggerated, as are forecasts that after Russia's WTO entry non-residents' share of the country's banking capital will rise dramatically. The experience of recent years has shown that international groups wanting to establish themselves on the Russian market are already able to do so.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.