August 2007
Russia: Banking sector investment continues apace
Investor appetite for exposure to the Russian banking sector shows no sign of weakening, with a series of transactions concluded in recent weeks. Headline-grabbing deals included foreign purchases of stock in MDM Bank and Rosbank. Domestic consolidation also continues, with the sale of LipetskComBank to Bank Zenit the latest example.
MDM Bank has secured a brace of minority shareholders, with investment company Olivant and supranational agency International Finance Corporation coming on board in a move that MDM’s management hope will help propel it into the country’s banking top 10. MDM is Russia’s 15th-largest bank by assets. London-based Olivant is taking an initial 10% stake with an option to acquire a further 5% equity interest within six years. "We view the Russian banking sector in general and MDM bank in particular as a dynamic environment with considerable growth potential," says Olivant’s chairman, Luqman Arnold, who was already an MDM board member and chairs its strategy committee
For its part, the IFC, which is the private-sector arm of the World Bank, is set to take a 5%...
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