Dmitry Medvedev, hand-picked successor to Vladmir Putin, got an early vote of confidence from the west on Monday. As exit polls were suggesting that Mr Medvedev had secured about 70 per cent of the vote in Russia’s presidential election, Barclays said it was going in to the country with the purchase of Expobank.
Barclays will pay $745m, from existing resources, for Expobank, which has 32 branches focused on retail and commercial banking in Moscow and St Petersburg in the west of Russia. Barclays already does some business in the wild east through its BarCap investment bank. But the purchase of Expobank will give the UK bank a foothold in Russia’s fast-growing market for financial services.
The potential of the Russian market – where only 45 per cent of the population currently use banking services and about a quarter tap any form of consumer credit – has attracted banks from around Europe, including Societe Generale. Rising disposable incomes and increasing confidence in financial institutions means that Euromonitor forecast the use of cards to increase by as much as 400 per cent over the next four years.
The testing dynamics of the recast political elite should not overly trouble Barclays – though its deal will need the regulatory nod before its forecast close in the summer.
Barclays head of retail and commercial banking Frits Seegers said:
“Expobank is a well-run bank with a good track record of innovative distribution and represents a great opportunity for Barclays. Its existing relationships and infrastructure create the ideal platform for us to become one of the leading retail and commercial banks in Russia, one of the world’s fastest growing economies and a market we have been keen to enter for some time.”