Hundreds of Russian banks have no choice but to close down, merge or be acquired by larger rivals as a result of mismanagement, experts told Bloomberg.

The country has more than 820 lenders, a staggering number of which have a high ratio of bad loans on their balance sheets. Many will soon disappear.

“Russia has far too many licensed banks,” Christopher Weafer, a senior partner at Moscow-based consulting firm Macro Advisory, told Bloomberg. “Cutting the number to between 200 and 300 would be a very positive step.”

The staggering report comes as Russian President Vladimir Putin claimed during an appearance on national television that Russian banks have “grown well” and the economy is beginning to climb out of recent doldrums.

"Experts believe that we have passed the peak of the problems,” Putin said during his annual question and answer show, according to AFP. "We've corrected the rate of the national currency, nothing burst and everything is working.”

Consolidations in the banking sector often happen during economic hardships such as the Great Recession, which saw several U.S. banks fail or taken over by larger institutions.

But experts who spoke to Bloomberg say the country’s banks will see bad loans climb from 9.5% to about 15% of total assets.

“Consolidation is absolutely a must,” Igor Vayn, CEO of investment bank Renaissance Capital, told Bloomberg. “A lot of these banks are inefficient, can’t provide quality service and don’t provide their clients with prudential lending practices.”

Corruption, poor lending practices and suspicions of money laundering and terror financing are also dragging the sector down — causing central bank Governor Elvira Nabiullina to revoke licenses or severely restrict some banks’ viability.

A further 100 banks have seen their licenses revoked by regulators for various reasons since the start of last year, with eight of those actions coming in the last eight weeks, Nabiullina told Bloomberg.

Svyaznoy Bank ZAO, Russia’s 96th-largest, announced Wednesday that officials handed down a six-month suspension from accepting new deposits and other banking activities.

And the country's banks exposed to Ukraine lost $5 billion last year, according to ratings agency Standard & Poor's and face further losses "of a similar magnitude" this year.

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