By Jennifer Yousfi
Barclays Bank PLC (BCS) announced yesterday (Monday) that it had purchased Russian bank Expobank for $745 million. The deal represents the latest European bank seeking to cash in on Russia's fast-growing economy.
Russia's annual lending growth is growing at a 45% clip, The Wall Street Journal reported, making it the fastest-growing banking market of the BRIC countries - Brazil, Russia, India and China.
U.K.-based Barclays, which already owns banking operations in Portugal, Spain and South Africa, has been looking to expand internationally, as the U.K. economy grew at less than 3% last year.
By contrast, Russia's economy grew by 10%. And that prosperity is fueling the consumer lending business, as Russia's emerging consumer class seeks auto loans, credit cards and mortgages, The Journal reported.
"Expobank is a well-run bank with a good track record of innovative distribution and represents a great opportunity for Barclays,", Chief Executive, Global Retail and Commercial Banking, Barclays said in a statement.
Barclays' expects to profit from the acquisition as early as 2011 and will finance the purchase with existing cash reserves.
The Expobank purchase represents the latest in a string of similar deals in which European banks made investments in Russia's financial sector.
Just last month, Paris-based Societe Generale (OTC:SCGLY) increased its stake in OAO Rosbank. In June 2007, Italian bank Unicredit SpA acquired Moscow Bank. And Austria's Raiffeisen International Bank purchased Impexbank in 2006.
News and Related Story Links:
- Barclays Bank PLC Press Release:
Barclays to acquire Russian bank Expobank
- The Wall Street Journal:
Barclays Looks to Expand In Russia With Expobank Buy
- Bloomberg News:
Barclays Acquires Russia's Expobank for $745 Million