Top Russian bank eyes SA opportunities
Office to open in Sandton in July
THE Russians are coming — with bags full of roubles.
Gazprombank, Russia’s thirdlargest bank, is in the process of interviewing and appointing a South African chief executive to run the business when it opens in July.
This week, Gazprombank’s deputy chairman, Oleg Vaksman, was in the country for a series of meetings, which included talking to South Africa’s “quality bankers”.
The bank — which will be based in Sandton, Johannesburg — is also on the verge of signing partnership agreements with local banks and government institutions.
Although it will not provide consumer-based lending, it will perform investment banking, which in all probability will be primarily with Russian companies looking to expand into Africa.
Vaksman knows a bit about Africa, having worked for First National Bank as chief of operations in its analysis unit.
“We need to learn to walk before we run,” he said.
The bank would look to fund projects worth between $10-million and $250-million, adding that a number of Russian companies had already spoken to him about entering South Africa and the region, including mining and construction firms.
“The interest is becoming more active. What we need now is more deals,” he said.
Although South Africa and Russia have strong political and historical ties and are both members of the Brics club, the relationship has not translated into concrete business flows.
Investment Solutions chief investment officer Glenn Silverman and economic research head Lesiba Mothata visited Russia and other Brics countries recently to investigate how those countries could benefit from this alliance.
Silverman and Mothata concluded that Russia was not easily accessible to foreign investors without having strong government connections. They also found that Russian stateowned enterprises often made decisions based on geopolitical reasons, rather than pure commercial merits.
One of Gazprombank’s strengths, Vaksman said, was its experience in dealing with mining projects. So it would spend a lot of time focusing on oil and gas opportunities presented by countries such as Mozambique. It was also hoping to work with Eskom on renewable-energy deals.
The turmoil in South Africa’s mining sector suggests deals may be in short supply, but Vaksman said there would be “opportunities”.
“We believe this sector will come out. It is globally too strong. South Africa needs it to come out of these crises,” he said Although it is not the first Russian bank to open in South Africa — Vnesheconombank also has offices in Sandton — it is significant because it is Gazprombank’s first established office in Africa.
But it seems to have joined the party late. Besides Vnesheconombank, a number of Chinese lenders have already set up shop in Johannesburg, including the Industrial and Commercial Bank of China and the Construction Bank of China.
But Vaksman said: “First to the party does not mean the person has the most fun [at] the party. And the first-mover advantage sometimes exists, sometimes it does not.”
The Moscow-based lender will have picked up tips from Standard Bank’s London office, with which it has a strategic alliance. Standard Bank was in Russia until 2011, when it sold its 36.4% of investment bank Troika Dialog to Russia’s largest bank, Sberbank.
The plan is that it will service clients in the Southern African Development Community and East Africa. The 24-year-old bank emerged as the financing unit for the world’s largest gas producer and exporter, Gazprom. It now services 45 000 companies and three million private clients across the world.