Russia's economy shrank at the slowest monthly pace this year in September.  Apparently the Lada has become the quickest growing car brand in Germany since the fall of the Berlin Wall, spurred on by Merkel's cash-for-scrap program.  Putin has offered more funding to Avtovaz, but it is unclear as to whether Renault will participate.  The Russian automaker's management claim the company has no intention of dismissing employees whose retirement age is long-off.  VTB has acquired a controlling interest in Cristall's 11 distilleries, which make Stolichnaya vodka.  Steel maker Severstal says that production at its mills is regaining momentum.  Russia plans to restructure fixed-line operator holding company Svyazinvest by spring 2011.  Sheremetyevo Airport could be privatized to shore up the budget deficit.  The Times reports on the story of Sergei Frank, former transport minister, ...

The Chief Financial Officer of VTB, Nikolai Tsekhomsky, has resigned. He will be replaced by Herbert Moos.  Microsoft claims that the Federal anti-monopoly service's probe into its activities, which has now closed, found no breach of ant-trust laws in regard to the Windows XP operating system.  The owner of Norilsk Nickel, Vladimir Potanin, has argued that the ruble must weaken to help Russia's exporters.  An article in Bloomberg suggests that the currency will fall 10% by March as the government fails to stem its deficit and continues to prioritize liquidity.  GM is unlikely to sell Opel to Magna because the carmaker is unwilling to give its intellectual property over to Russia, says the head of a pro-business group in Angela Merkel's party.  Mobile operator Megafon has posted a 4% increase in profit in the first six ...

The chairman of the German government-backed trust designed to oversee the sale of Opel has said that GM cannot afford to keep control of the European unit, as it needs to focus on its fortunes stateside.  According to the New York Times, the company's Vice President maintains that it wishes to sell but that certain questions remain.  The president of AvtoVAZ, Boris Alyoshin, has resigned.  Russia plans to create a holding company to put together the state's stakes in the country's two biggest car makers, Avtovaz and Kamaz.  Car manufacturer Gaz is adapting to the conditions of a low-demand market, says its CEO.  The Moscow Times reports that the number of consumers planning to buy a car within the next year has doubled to 6%.  VTB has acquired rights to a controlling stake in developer Don ...

The Economic Development Ministry has changed its forecast for the growth of GDP, predicting that the economy will shrink 8.5% this year instead of the 6-8% previously forecast.  The Ministry is more optimistic on inflation, predicting a rate of 12-12.5% instead of 13%.  Putin has ordered state banks to offer major corporations $13 billion in loans as Russia's economy shrinks for the first time since 1998.  Putin has apparently said that Russia should be aiming for a deficit of 2-3% of GDP as opposed to the 7.4% planned.  As Russia's second largest lender VTB struggles with bad loans, which have increased three-fold this year, the company may make 1,000 employees redundant.  The lender will make a loss this year.  Its chief financial officer has said the bank may require a second share issue ...

In its current issue, Global Finance Magazine lists what it calls the "Stars of the New Russia" across a variety of business sectors. A lot of the preamble will probably not come as a shocker to those watching Russia on a continuous basis, but there are a couple of quotes that leapt out at me:Kingsmill Bond, London-based senior Russia analyst at Troika Dialog:"Russian corporates are used to handling volatility and difficult times. They can adapt quite quickly. Other countries are not used to such dramatic changes in the economic landscape. Russian firms are used to being thrown around and rebounding very quickly. They have had periods of high growth and high inflation in the past, and they have recovered. Russia is better positioned to bounce back when markets return. Russia will bounce back harder and quicker [than in 1998]."Alexandra Evtifyeva, Senior Economist of ...

Economic Development Minister, Elvira Nabiullina, has said that a reworked anti-crisis program will soon be submitted to the cabinet.  Russia announced a budgetary deficit of $1.5 billion in the first quarter.  Foreign Minister, Sergei Lavrov, says that the world's financial systems will have to be radically overhauled in the wake of the crisis.  Banks' bad loans may increase fourfold to $70 billion this year.  Russian Railways is predicting losses of $1.48 billion in 2009 and will make 53,700 workers redundant.  The investment branch of Russian lender VTB has created an index for foreign investors to speculate on whether the ruble will fall.  Mobile Telesystems says Blackberries will go on sale in Russia within the next two weeks.  Meat firm Cherkizovo announced a 27% increase in net income, and is positive about prospects in 2009.  ...

strongFinancial News/strongbr /br /Jason Corcoran in Moscow br /08 December 2008 br /br /Increasing competition from new entrants and sharp falls in equity prices are driving down the margins of Russia’s sub-custody banks.br /br /The recent arrivals of Sweden’s SEB and France’s Société Générale, plus the increasing participation of Russian banks such as VTB and Gazprombank, are forcing fees downward but bringing greater segmentation and opportunities for niche providers.br /br /Natalia Sidorova, head of securities services at ING Wholesale Banking in Moscow, said: “Margins are decreasing, which is inevitable in a busy market like Russia driven by competition. Fees used to be about 20 basis points but have come down significantly in recent years.”br /br /Serhiy Berezhny, head of trust and securities services at Deutsche Bank, agreed but said high fees could still be charged depending on the volume of client assets. br /br /He said: “Different clients are ...

Financial NewsJason Corcoran in Moscow and Harry Wilson17 Nov 2008 Moscow-based investment bankers are at the sharp end of job cutsRussian index slumpsIt seems like a different age, but it was only recently that Moscow-based investment bankers had firms fighting to secure their services and could command pay packages commensurate with demand.Senior Moscow-based bankers and those covering the Russian markets asked for and got lucrative pay deals as local brokers and large international investment banks fought a hiring war to build their businesses in the country.Guaranteed packages in excess of $10m (€7.8m) were not unheard of and even junior staff with experience of the Russian markets received $1m guarantees to join rivals.In early 2007, Russian investment bank Alfa-Bank recruited the head of UBS’ Moscow office Ed Kaufman for a ...

Financial NewsJason Corcoran in Moscow28 October 2008 Russian state bank VTB is defying the global downturn and dismal domestic markets by opening new sales and representative offices for its investment banking arm in New York and Dubai.Yulia Chupina, the VTB board member responsible for the expansion of its investment banking subsidiary, said the bank would open offices shortly in the US and Dubai.She said: "We are being cost conscious by freezing hiring and development in some areas while continuing to develop in other areas."VTB has already established three investment banking hubs in Moscow, London, and Singapore. It has dominated this year's hiring war in Russia by recruiting bankers from Deutsche Bank and key figures from a number of banks in Moscow.In response to the crisis, the bank said it was considering cutting costs by between 15% and ...

Today the Wall Street Journal is reporting that the British bank Barclays is looking to raise some $10 billion in capital from Kremlin-controlled banks Sberbank and VTB. The bank has studiously avoided any government bailout plan in the UK, which could result in restrictions on dividend payments and state influence over board seats. However it seems unclear how Barclays feels about Russian government influence over their operations. So what has led this fine British financial institution to the doors of the Kremlin? Barclays CEO John Varley has been strenuous about his opposition to state intervention in the banks, commenting that "Those who have government shareholdings will be more constrained in their strategic and operational flexibility than those who are independent. (...) There will be some people in the employment market in the United Kingdom who will make the ...