Bank for wealthy clients

Swedbank will open 100 branches in Russia

Following the subsidiaries of foreign banks operating in Russia, the Swedish Swedbank intends to develop its business in the regions. Within seven years, Swedbank will open about 100 branches in Russia, 15 of which will be created in the next two years. The bank will develop as a universal bank. For now, lending to companies will remain a priority for the bank, but having recently received the right to work with individuals, it will engage in attracting deposits and retail lending. To develop the business, the bank will double its capital by the end of the year. This was stated yesterday by the chairman of the board of the bank, Maris Mancinskis.

The Swedbank group began operating outside Sweden in 1999, purchasing 50% of the largest Baltic financial group Hansabank, later increasing its control to 100%. Hansabank occupies 30-40% of the banking market in Estonia and Latvia, and 20-30% in Lithuania. At the beginning of 2005, the Hansabank group acquired 100% of the capital of the small Russian bank Quest for $3.4 million. Quest, which specialized in servicing corporate clients, was renamed Hansabank in September of the same year. Prior to this, its authorized capital was increased from 38 million to 2.8 billion rubles, which allowed the bank to become one of the 50 largest banks in Moscow at that time. A few months later, the European Bank for Reconstruction and Development entered the capital of the Russian Hansabank, purchasing 15% of the credit institution.

The bank continued to provide services and lending to companies, and at the beginning of 2007 it took 88th place in terms of assets (17 billion rubles, or about 500 million euros) in the Interfax-CEA ranking of Russian banks. According to the bank's data as of March 2007, its total assets in Russia reached 921 million euros, the bank issued loans for 787 million euros. At the beginning of this year, it became known that the management of the Swedbank group decided to rebrand the Russian Hansabank, renaming it Swedbank. The rebranding was recently completed. “We changed the name so that our customers understand that they are dealing with the same bank in the Baltics, Russia and other regions,” said Swedbank Group President Jan Liden.

In addition to the brand, the Russian Swedbank will also change its business strategy. According to Mr. Mancinskis, Swedbank will develop as a universal bank, focusing on clients with average income and above. At the end of April, the bank received permission to attract private deposits and now intends to develop its retail business, starting with mortgage lending. In the second half of the year, the bank will begin providing personalized services to high-net-worth clients. “This will be individual account management and large loans for the purchase of luxury housing. The latter service is still very rarely provided in Russia,” believes Mr. Mancinskis.

To develop a universal business, the bank will need a network of branches and branches. So far, in addition to the head office in Moscow, the Russian Swedbank has only two branches - in St. Petersburg and Kaliningrad. According to Mr. Mancinskis, first of all, the network will develop in those cities where there are branches - 15 branches will open here within two years. In seven years, Swedbank wants to increase the number of branches to 100, opening them in other large cities. The bank does not name planned investments in network development. In order to support business development, the bank plans to double its equity capital to 180 million euros by the end of the year.

The path that the Swedish bank intends to overcome has already been passed by many subsidiaries of foreign credit organizations. First corporate clients, then private clients and, finally, business development in the regions. Today, almost all large foreign banks are already represented outside of Moscow and St. Petersburg.

Elena KHUTORNYKH