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30 Jul, 2007 04:13

UniCredit comes on strong in Russia

Italy's UniCredit is on a shopping spree in Russia. It's completed a merger with the International Moscow Bank and has purchased investment bank, Aton.

Following billion-dollar purchases in Kazakhstan and Ukraine, Italy’s biggest lender, UniCredit, is coming to Russia. It recently completed its merger with International Moscow Bank and bought an investment bank, Aton Capital.

The Eastern European arm of Italy's banking giant, UniCredit, believes in the Russian market. So much so, that it just bought the International Moscow Bank and spent $US 400 MLN on the brokerage house, Aton.

Retail lending in Russia is expected to triple over the next three years. Unicredit hopes to grow with the market and expand into the regions.

“We have very ambitious plans on opening new outlets, not only in Moscow and in Saint-Petersburg but also all over the country. We expect that we will have about 120 outlets throughout the country,” said board member of Unicredit Evgeny Retyunsky.

But with just a 2 % market share, the International Moscow Bank is not a brand widely recognized outside the capital. The management plans a re-branding to replace the local name with well-known trademark UniCredit aiming to become a top five bank within the next few years:

“It will be a very difficult and challenging task to even up to 5%. For making more we will do more,” added Evgeny Retyunsky.

Buying Aton, with its equity, fixed income and corporate finance divisions, will allow the bank to focus on not only retail, but also on investment banking – a smart move, according to analysts.

“I guess that UniCredit will be able to develop the surge between the corporate retail landing  and also the investment banking operations which is a huge advantage while penetrating into the Russian market,”  commented Natalia Orlova, an expert of Alfa Bank.

UniCredit is completing a merger with one of Italy’s banking groups, CapItalia. The deal will create one of Europe's biggest banks, and it’s already raising concerns among anti-monopoly regulators.