05 June 2003 21:51
Summer snow heralds bank`s Moscow debut
Summer snow heralds bank's Moscow debut Financial Services Editor THE Russian market is not for the
faint-hearted, as Standard Bank has discovered more than once. It snowed in an allegedly mid-summer Moscow yesterday,
just as Standard was preparing to launch its new Russian investment bank & 151; at an outdoor reception for 400
people in Moscow's botanical gardens. Luckily it had warmed up to a few degrees above freezing by yesterday
evening, when the party began for the bank's Russian clients and counterparties, hosted by Standard's CE,
Jacko Maree. The new fully fledged bank, an upgrade from the representative office Standard has had in Moscow for the
past six years, will be able to trade in Russia's domestic foreign exchange and money markets, expanding the
group's presence in a market where it is already doing substantial business. It has closed several deals this year,
raising finance for Russian banks and resources companies, in precious metals, oil and steel. Maree said the banking
licence would enable it to transact in local money and foreign exchange markets, broadening the product range it can
offer its Russian client base. Standard Bank's London-based international operations, which contributed 8% of the
group's earnings last year, focus on emerging market debt capital and resource banking activities. Russia has been
the cause of a fair bit of trouble for Standard. The bank had early on taken on an exposure of about $90m to Russian oil
producers. During the Russian debt default that followed the 1998 rouble crisis, Standard looked like it was going to be
hit hard, an issue which rival Nedcor made much of during the hostile (but unsuccessful) takeover bid it launched for
Standard in 2000. Standard eventually got all the money back. Maree says Russia has staged a strong recovery since its
troubles of the late 1990s and Standard has a good name there because it did not run away when times were difficult.
That gives it an advantage over the host of new entrants to Russia's financial markets. The Russian operation is
relatively small: Standard has put about $20m of capital into it, which it can hold in dollars, minimising currency
risks. It employs 30 people in Moscow, which may rise to 50. But Standard has no aspirations to turn the operation into
a big bank. Standard's upgrade of its Russian operation comes after it recently did the same in Brazil, upgrading
from a representative office to a full banking licence, in line with a plan to expand activities in the two key emerging
markets.
[AIW [Asia Africa Intelligence Wire]] |
RUSSIA IN FACTS
