Putin Pushing Russian Banks Points 'Two Tanks' at Western Firms
20.05.12
Dec. 14 (Bloomberg) -- Russia's government is tightening its grip on capital markets by expanding the investment-banking arms of two state-run lenders at the expense of Western firms.
OAO Sberbank, Europe's third-largest bank by market value, and VTB Group, Russia's second-biggest, are boosting their corporate and brokerage businesses as foreign lenders, including Italy's UniCredit SpA and Paris-based Societe Generale SA, retrench and pull cash from the region amid a spreading debt crisis in their home markets.
“The Kremlin has driven out some of biggest Western retail banks and now has two tanks on the investment-banking lawn,” said Eric Kraus, an independent asset manager in Moscow who previously worked as a strategist for Otkritie Financial Corp., a brokerage partly owned by VTB. “Sberbank's arrival will make the competition nervous because VTB's investment bank almost destroyed Deutsche Bank in Russia.”
Barclays Plc and HSBC Holdings Plc, both based in London, are among Western lenders that have abandoned retail operations in Russia as state banks increase market share. Now the competition is shifting to investment banking, which foreign firms have dominated since the collapse of the Soviet Union.
Source: BusinessWeek