While there appear to be plenty of opportunities in Russia for investment bankers, the retail and commercial banking marketplace is shrinking at an alarming rate, reducing competition and closing avenues for international investors.
Sweden’s Handelsbanken said last month that it was pulling out of Russia, and this follows the not entirely welcome announcement that Otkritie Financial Corporation was taking over Nomos Bank, one of the few independent names competing with the local behemoths like VTB and Sberbank.
This follows moves by HSBC, Barclays, Santander, Swedbank and Rabobank to pull out of the country in recent years.
Aside from the headcount reductions, there are bigger concerns about this trend. As the FT pointed to recently, Nomos Bank was viewed as one of the few ways of entering the Russian banking market, and the Otkritie deal is another reason for them to shun the IPO market in the country.
It also doesn’t help that another Russian bank’s flotation bombed during its attempted dual listing in London and Moscow yesterday. Promsvyazbank, which hoped to raise $345-$414m cancelled the listing because it couldn’t agree a fair price with investors.