For a while now, Russian banks’ international push has been the big story. As emerging markets boutique Riverhouse Partners notes in its latest newsletter, Chinese banks’ much awaited push has yet to materialise. Russian banks, however, have been going for it.
Hence, Renaissance Capital has gone from having FSA 56 registered persons in London in January 2010 to 78 at the last count in March 2012. Otkritie went from 23 in January 2010 to 39 in January 2012 and VTB went from 69 in January 2010 to 113 in March.
Suddenly, however, there are signs that the Russian story may be started to falter. As we noted yesterday, RenCap made a loss in London and globally last year. Today, Financial News reports that Otkritie has been leaking staff to Moscow-based rival Broker Credit Services. IMAS figures for Otkritie’s FSA registered persons reveal they fell to 32 in March, from a high of 43 in November 2011.
Otkritie’s most recent report (for the year ending December 2010), suggests it’s not the best of payers. Its highest earner in London took home £200k and average compensation was £61k. However, this is at odds with the $17.5m it paid to lure a team of 5 fixed income bankers from Knight Capital in January 2011 (this was allegedly embezzled by team leader George Urumov).
RenCap and VTB appear to be better payers. In the year ending December 2011, RenCap paid its average employee in London $485k, in packages that included deferred cash and stock. In the year ending December 2010, VTB paid $489k.
Having built up their London staff, the big question now is whether VTB and RenCap can sustain them. Both banks made substantial redundancies in the City in 2008 and 2009; RenCap cut 40% of its staff. They may be hiring, but are Russian banks really safe to join now?