Citi sees Russia business pick up as crisis abates
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
FILE PHOTO -- People walk beneath a Citibank branch logo in the financial district of San Francisco, California July 17, 2009. REUTERS/Robert Galbraith/File Photo
Get daily under-the-radar research with StreetInsider.com's Stealth Growth Insider Get your 2-Wk Free Trial here.
By Alexander Winning and Katya Golubkova
MOSCOW (Reuters) - U.S. bank Citi (NYSE: C) is seeing business pick up in Russia as the country's economic crisis abates and is staying as engaged as it can given Western sanctions, its Russia head said.
Marc Luet, who is also Citi's head for Ukraine and Kazakhstan, said his bank has become busier with Russian mergers and acquisitions (M&A) and that there is growing interest in corporate debt issuance.
"We're seeing a pick-up in debt capital markets (DCM). Part of it is liability management, part of it is new issuance," Luet said in an interview at the Reuters Russia Investment Summit.
Russian debt issuance slowed to a trickle after the United States and European Union imposed sanctions on Russia in 2014 over the Ukraine conflict.
The sanctions limited access to international capital for large Russian banks and certain other businesses, scaring away investors and spooking compliance departments at top banks.
"I don't think we're going to quite return to the 2013 level, but we're going to see more issuance than this year. And this year was better than last year," Luet said, adding Citi had arranged Russian DCM deals worth more than $15 billion in 2013.
Better pricing conditions, an economic stabilisation and the maturity profile of outstanding debt are all encouraging greater issuance, Luet said.
A restraining factor is that many Russian companies have cut capital expenditure since the economy entered a deep slump when global oil prices tanked in 2014. A halting economic recovery this year has yet to spur any great increase in investment plans.
Luet said that investors had become accustomed to the sanctions and that banks had established which deals they could handle and which they should leave alone.
"We're going to stay as engaged as we can and take advantage of any opportunities that arise," he said.
Like many other global banks, Citi did not help the Russian state with this year's privatization program, including a stake sale in diamond miner Alrosa
"We didn't stay away from the Russian government's privatization program per se," Luet said. "Every case is different, every transaction is different. It's not a blanket approach. We look at what's coming up."
Citi's Russian operation earned about 14.55 billion roubles ($225 million) in profit last year, roughly double what it made in 2014 and better than many domestic Russian banks.
Luet said that Citi had stuck to its tactic of serving multinationals and large Russian blue-chip companies as well as affluent retail clients.
"We haven't changed our strategy because of the crisis," he said.
Follow Reuters Summits on Twitter @Reuters_Summits
(Additional reporting by Kira Zavyalova, Christian Lowe and Dmitry Antonov; Editing by David Goodman)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Ladder Capital (LADR) to Explore Sale - Reuters
- Surprise winner of Gambia poll eyes new cabinet, reforms
- Fed official stands by Wall Street reforms, says must complete work
Create E-mail Alert Related CategoriesReuters
Related EntitiesCiti, Twitter
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!