Salient to Investors:
Russian investment banks controlled by Russia are squeezing out foreign competitors, helped by a bailout of the country’s richest men five years ago.
Freeman & Co says Russian banks won 38 percent of fees in 2012 versus 7 percent in 2005, European banks dropped to 32 percent from 61 percent in 2005, and US banks dropped to 20 percent from 27 percent in 2005.
Sergei Arsenyev at Goldman Sachs said this is not uniquely a Russian issue because this happened in Germany 20 years ago.
BNP Paribas said state-owned companies account for half of Russia’s economic output versus 42 percent in 2008 and 38 percent in 2006.
Gergely Voros at Morgan Stanley said Sberbank and VTB will never be dominant in all areas of investment banking, leaving plenty of room for foreign rivals. Voros said the Russian market will become like France, where two large home-grown banks are strong in some areas of investment banking and not so strong in other areas, strong with some clients and not with others.
Julian Rimmer at CF Global Trading said in high-profile IPOs, corporates still want the expertise of Goldman Sachs and JPMorgan, but this dependence will gradually diminish as Sberbank and VTB expand their investment-banking reach.
Click here to receive free and immediate email alerts of the latest forecasts