Barclays is going to sell its retail business in Russia
British bank Barclays will sell its Russian unit and focus on investment banking, saying it was unable to compete in local retail business.
"In Russia, we've made a decision to focus our business on government entities, large corporates and multinationals, and to exit the retail business, where we were unable to compete," Bob Diamond, Barclays chief executive, said during a conference call on Tuesday.
State-owned banks control around 65 percent of Russia's top-100 banks' assets, according to Reuters estimates, with
Sberbank (the largest bank in Russia and CIS) accounting for almost 50% of deposits in the banking system.
"The strongest opportunity for Barclays in Russia lies in expanding our investment banking business focusing on corporate clients, financial institutions and government entities," Bob Foresman, a president of Barclays Capital Russia, said in a statement.
Barclays Bank, ranked Russia's 105 largest bank in terms of assets, bought domestic mid-sized Expobank for $745 million in 2008, just before the global financial crisis cut credit appetite and eaten in banks' profits.
Barclays hopes to complete the sale by the end of 2011, a spokeswoman for its Russian division said.
Spending more than 4 trillion roubles ($136.8 billion) to support the country's banking and financial sectors during the economic meltdown, Russia started to tighten rules in the system, with private-owned banks facing increasing competition from the state banks.
Early on Tuesday, Barclays bank said it will review its portfolio and cut costs to boost profitability as it grapples with tougher regulations which it said will lower its returns.
Source: ReutersDate: 15.02.2011 [282]
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