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 ...

Today the Lex column at the FT points toward the massive redistribution of assets happening in Russia as a result of the global financial crisis, and the routing being experienced by a number of the country's most wealthy oligarchs (Oleg Deripaska had to give up his stake in Hochtief). However, unlike the 1998 Russian financial crisis, the government appears set to dramatically extend its influence over the economy. Even so the Russian rout is triggering a redistribution of assets as some oligarchs are forced to sell assets to repay loans or meet margin calls. This time however – unlike Russia’s infamous 1995 loans-for-shares scheme and 1998 financial crisis – the state is set to increase its influence over the economy, continuing the Putin-era trend. First, the Russian government has channelled extra liquidity through state-owned banks Sberbank and VTB. Some $50bn has been earmarked for Vnesheconombank, a third state ...

Over at Russia Economy Watch Edward Hugh has posted on the Russia Economy plan where the financial ministry increased its funding provision for the Russian banking system on Sunday. )See post here)

As the article reports, the latest increase in help for Russia economy suggests that providing an additional $130 billion of liquidity to Russia’s financial markets, which are still under great pressure from recent investor drop off.

Also under the latest plan for Russia economy, the number of banks who would be entitled to the funding boost has been increased from 3 to 28. During first drafts of the plan, the funding assistance was to be restricted to only the nations’ three largest banks, VTB, Sberbank and Gazprombank. This increase in availability of funds is intended to more thoroughly reinvigorate Russia economy.

The Russian finance ministry also claimed it will provide an extra $24.21 billion in the form on credit …

Russia’s finance ministry widened the emergency budget funding provision for Russia’s banking system on Sunday, suggesting that despite providing $130bn (€90bn) of additional liquidity to the country’s financial markets the banking system is still under pressure. The number of banks entitled to funding has been expanded from 3 to 28 - previously funding was restricted to the country’s three largest banks, Sberbank, VTB, and Gazprombank.The finance ministry also said it would provide an additional 600bn rubles ($24.21bn, €17bn) in the form of 3 month credit with a minimum rate of 8.75 per cent. The funding will be auctioned today.Russia's finance minister Alexei Kudrin met yesterday with representatives of more than 20 Russian banks, who had been arguing for such a measure to be taken since early last week. Bankers had been complaining that government credits provided to the three top ...

Financial News OnlineJason Corcoran in Moscow18 September 2008 Energy giant Gazprom's pension fund manager Leader is close to buying up troubled Russian brokerage KIT Finance as the government drew up a "red list" of 15 banks requiring urgent capital injections.In a statement late on Wednesday night, KIT said it was in the final stages of selling a controlling stake to Leader Asset Management with credit support from state-controlled banks Gazprombank and VTB.The rescue of KIT comes as Moscow's stock markets were suspended for the second day in a row and as the state pledged $60bn (€41.9bn) to save banks as a spreading liquidity crisis threatened to push the sector into insolvency.Minister for Finance Alexei Kudrin told Russian media several banks were have difficulties with meeting their obligations and were now holding talks with strategic investors.KIT, a ...

Financial News OnlineJason Corcorcan in Moscow17 September 2008 Russian brokerage KIT is holding talks with strategic investors after defaulting on its debt as analysts suggested a number of small to medium-sized bank are facing similar difficulties refinancing on the repo market.KIT, a second tier investment bank, was forced to look for a buyer after it defaulted on a repo deal. Investment banking sources said a buyer had been found and announcement would be made by close of play today.A KIT spokeswoman declined to comment and said a statement would be made at 5pm Moscow time.Analysts said KIT's problems were contagious and the state would have to intervene quickly to restore liquidity and confidence in the market.David Nangle, director of financial research at Renaissance Capita, said: "There are other banks and boutiques with exposure to repos whereby ...

The Independent Tuesday, 1 July 2008 Bankers were thought to be facing tough times after the credit crunch. But in Moscow, where business is booming, Brits are being attracted by soaring salaries. By Jason Corcoran and Nick ClarkIt has been a very good year to be Russian. The national football team sparkled at Euro 2008, it secured the unrivalled musical accolade of winning the Eurovision Song Contest, and while the markets around the world disintegrate, its own economy has continued to boom.Soaring consumer spending, oil past $140 a barrel, record numbers of mergers and acquisitions (M&A) and a high growth rate means the financial focus is firmly on Russia in 2008.Investment bankers in the West are charging to Moscow to cash in on the rise of lucrative takeover deals, as London and New York have increasingly become graveyards for the ...