The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Russian investment banks scrabble for a strategy

Western investment banks are competing to acquire Russian investment houses, while the chief executive of VTB, the country’s second-largest bank, is prioritizing either the acquisition of a local investment bank or the establishment of a partnership with an international player. But can domestic banks successfully compete with their international rivals in the longer term? Kathryn Wells reports.

VTB CHIEF EXECUTIVE Andrei Kostin is trying to juggle priorities. First among these is the bank’s initial public offering, slated for May, when it hopes to raise about $4 billion through a dual London/Moscow listing.

At the same time, he is on the lookout for domestic investment banking assets to acquire, to complete what he sees as the final piece in the jigsaw puzzle of VTB’s activities, after several years of extensive acquisitions.

Prominent among these was VTB’s enforced acquisition of Guta Bank during a banking sector liquidity crunch in 2004 and its transformation into VTB24, the bank’s retail arm. Last year VTB also increased its holding in St Petersburg-based Promstroibank to a majority stake, boosting its presence in the northwest of Russia.

The acquisition of an investment banking target is likely to be VTB’s final major purchase for the foreseeable future. According to Kostin, it is talking to three firms about possible acquisitions, and a further two houses about developing an investment banking partnership. Proceeds from the IPO could be used partly to finance such an purchase.

Any acquisition would follow hot on the heels of last November’s rebranding of Moscow Narodny Bank into VTB Europe, whose role Kostin sees as an “investment boutique, which will concentrate its efforts on Russian clients approaching the European markets, and [which] will act as an investment pad for Russian clients who plan to operate in Europe and beyond.”

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree