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to attract investment into big Russian projects. The plan was for the RDIF to match foreign investment dollar for dollar, but the hope was as investors get more used to investing in Russia (and made profits) the contribution from the RDIF would fall to something close to one dollar for every ten the foreign partner put in, CEO Kirill Dmitriev told bne IntelliNews at the time the fund was set up. The RDIF in effect was to provide big Western investors with a “krysha”, or “roof”, as the Russians say – political protection from abuse.
VTB plans to buy two mid-sized regional banks. A ccording to Vedomosti these are Zapsibkombank - the leading bank in Tumen region (the 59th-largest Russian bank by assets) - and SKB-Bank, the leading bank in Sverdlovsk region (number-56 Russian bank by assets). VTB is currently undertaking due diligence at both banks and discussing pricing. VTB mentioned earlier that it is interested in strengthening its regional positions through M&A. Both banks look quite healthy, with good asset quality and extensive regional branch networks. Pricing is the main question here and it will be an interesting indicator for banking sector M&A as a whole.
Bank Melli Iran (BMI), its Russian subsidiary Mir Bank Russia and the Central Bank of Russia have agreed to boost mutual banking cooperation , according to a February 20 report from Mehr News Agency. Iran’s Mir Business Bank is the sole Iranian financial institution based in Moscow; the bank has been hit by US sanctions in the past and mostly shuttered operations in 2013. The latest announcement clarifies that the bank is running once again. Russian central bank governor Dmitry Eskobelkin and BMI managing director Mohammadreza Hosseinzadeh said the two sides were ready to help businesses from both countries to conduct trade with each other. The Iranian banking official added: “Mir Business Bank plays a significant role in forming a collaboration between the two countries’ banking systems, and it is run under the auspices of Russia’s rules and regulations, while it has managed to provide the businessmen with excellent banking services.” Trade turnover between Russia and Iran increased by 80% y/y in 2016, according to a previous financial deal signed in December between the two parties. The amount of financial payments flowing between Russia and Iran tripled during last year.
Russia’s central bank has issued a license to Oney Bank, part of French retailer Auchan’s group of companies, that allows it to take money from individuals on deposits in the bank nominated in rubles or foreign currency, the regulator said in a statement on Monday. According to the legislation, the bank became a participant of the deposit insurance system, which means that each depositor will receive redemption of up to 1.4 million rubles if an insured event occurs. Oney Bank launched operations in Russia in 2013, and its long-term strategy is to create a stable banking business for servicing corporate clients and individuals, the bank said on its Web site.
UniCredit, the largest bank by assets operating across Central and Eastern Europe, more than doubled net profit in the region to €1.4bn in 2016 , while its Italian bad loan woes pushed it into a whopping overall loss of €11.8bn. The Italian lender said the main regional contributors to profit were Turkey with €378mn (+18.8%), Czechia with €223mn (+6.7%), Bulgaria with €182mn (+5.8%) and Hungary with €173mn (+40.6%). In the fourth quarter regional net profit was €199mn, halving compared to the previous quarter but more than doubling year on year. Loan loss provisions over the year fell 20.5% to €791mn but in the fourth quarter, however, they more than doubled q/q to €313mn from increasing coverage mainly in Russia and Czechia.
74 RUSSIA Country Report February 2017 www.intellinews.com