This paper explores how bank characteristics and the institutional environment influence the composition of banks' loan portfolios. Using a data set of the Central Bank of the Russian Federation (Bank of Russia) and results of the recent Rating Agency (RA) Expert survey on bank lending to small sized enterprises in Russia, which was conducted in 2006, we show that bank characteristics such as ownership and size are important determinants of bank customer focus. In particular, we find that foreign banks are relatively strongly involved in household lending and lending to small-sized enterprises, while lending relatively less to large domestic firms. This survey provides statistically based evidence that small banks lend relatively more to small enterprises than large banks do, while large banks appear to have a comparative advantage in lending to large customers.