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23 Apr, 2008 14:36

Russia lures foreign banks

Russia is proving an attractive haven for foreign banks – both large and small. Montenegro's financial group Atlas has chosen Russia to open its first foreign bank affiliate. A.B.M. Bank will focus on Russian residents who invest in Montenegro'

Montenegro – like Russia – has a fast growing real estate market and that’s attracting investors. Last year Russia accounted for 10% of all investment into Montenegro.

Now Montenegro's leading financial group Atlas is bringing its banking business to Russia.

Atlas’ president Dushko Knezhevich believes Russia will hardly be influenced by the wave of world recession.

“Russia is possessing a great amount of energy resources, it's also developing rapidly. The time has passed when all businesses rushed to the US, they're now coming to Russia,” Knezhevich says.

Knezhevich first came to Russia at the start of the 1990s. His first business failed, and he lost all his money. Now – he says – the time has come.

The head of the Russian affiliate A.B.M. bank Oleg Milovidov says its partner faces fewer risks here than in any other country.

“Now everyone in the world is already aware that Russia is some kind of an island of financial stability, which is backed by stable economy,” Milovidov says.

The client base of the bank looks promising, given that Montenegro hosts aluminum and steel plants owned by Oleg Deripaska and construction projects led by Russia's leading builder Mirax Group.

The operation plans to attract assets worth $US 130 millions by the end of this year.

Most analysts however say the bank is too small to have a major influence on Russia's banking sector.