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Alfa plus, or minus?

The words "frying pan" and "fire" spring to mind. Sitting in his office overlooking the trading floor, Alexander Knaster, CSFB's Moscow president, discusses his move to Alfa Bank, where from October 4 he will take over the newly merged commercial and investment banking operation. Though troubled, CSFB remains the market leader in almost all areas of investment banking in Russia. Knaster's new employer, by contrast, was the house bank of one of Russia's weaker financial-industrial groups. Now it is being thrown into an ill-defined merger with Inkombank and the National Reserve Bank in a desperate bid to survive.

Knaster says he had two goals when he opted to move: to increase Alfa's share of merchant banking, with a focus on advice to foreign strategic investors; and to grow its depositor base. These will now take second place to reassuring restive depositors, and to rationalizing the bank.

He describes his job move as "courageous". Others lean more towards the word foolhardy. Parent company Alfa Group, run by Mikhail Fridman and Pyotr Aven, was caught napping in the asset grabs of 1996 and early 1997 in which rivals like Uneximbank snapped up state enterprises at knock-down prices.

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