Russian banks plot different paths to growth
Financial News (Великобритания)
Russian investment banks are taking divergent routes towards growing their businesses.
Sberbank CIB might have chosen to acquire and hire its way to the top, but rival VTB Capital seems to have picked a different path – it has announced its second major joint venture, this time with US investment banking firm Evercore Partners.
In an announcement yesterday, VTB Capital and Evercore Partners said they had agreed to work to develop cross-border business between Russia and the US.
Sberbank CIB and VTB Capital are both subsidiaries of Russian state-backed banks – Sberbank and VTB Bank, respectively. These parents have been busy acquiring and merging with regional commercial banks over the past decade.
But while both the investment banking units are aggressively hiring from bulge-bracket rivals such as Goldman Sachs, Bank of America Merrill Lynch and HSBC, they have chosen different global expansion plans.
According to yesterday’s statement from VTB Capital: “The cooperation will allow VTB Capital and Evercore Partners to develop joint business opportunities for cross border transactions and other projects involving Russian and North American companies, funds, government agencies, individuals and assets.”
The deal follows on from the June announcement between VTB Capital and Brazilian bank BTG Pactual, in which they agreed to pursue “opportunities” between Russia and Latin America.
Riccardo Orcel, deputy chief executive officer of VTB Group, said: “VTB Capital continues to build its international franchise and expand outside Russia and CIS [the Commonwealth of Independent States ] through partnerships and through leveraging the VTB Group's network of international subsidiaries.”
In comparison, Sberbank has been busy acquiring regionally. In January this year, it completed the acquisition of Russian investment bank Troika Dialog, recently renaming the venture Sberbank CIB.
Even Sberbank’s commercial acquisitions have been close to home. In September, it bought DenizBank, the eighth-largest bank in Turkey. Last year, it also bought the Eastern European operations of Volksbank of Vienna.
VTB Capital’s joint agreements, meanwhile, have added to a growing web of banks focusing on emerging markets. BTG Pactual already has a venture with China’s Citic Securities in order to access the Chinese market. Evercore also signed a deal with Citic in 2009 to pursue similar options, and late last year signed an agreement with Kotak Mahindra to pursue investment banking opportunities in India.
In a statement regarding the VTB Capital venture, Ralph Schlosstein, chief executive officer of Evercore Partners, said: “This alliance is another step in the globalization of our firm and adds to the strong network of relationships Evercore has formed with leading financial services firms in other markets.”
Evercore aside, there is a Europe-sized gap for the Russian banks, despite their acquisitions and joint ventures. Although both firms have sizeable presence in London, they languish down the European investment banking league tables. Sberbank and VTB Capital are in joint 35th place in the European investment banking fee league table year-to-date, earning $65m apiece, according to data from Dealogic.
However, the European hubs of both banks primarily service international clients.
VTB Capital declined to comment beyond their statement. Sberbank declined to comment. Evercore could not be reached for comment.