Saturday, 15 November 2008

BNP Paribas Targets Russian Tie-Up

Financial News: Dow Jones International News

14 November 2008

By Jason Corcoran in Moscow

French bank BNP Paribas is understood to be in advanced talks about a partnership with one of Russia's top 20 banks, three months after the head of its securities business in Asia revealed it was exploring possible deals to strengthen its presence in developing economies.

Representatives from BNP Paribas have been conducting due diligence at the Moscow headquarters of Trust Bank for the past three weeks, according to three sources close to the Russian group.

A spokeswoman for Trust Bank denied talks were taking place. BNP Paribas declined to comment. Pierre Rousseau, chief executive of BNP Paribas' securities unit in Asia, announced plans in August to acquire a brokerage in the country and strengthen its foothold in the developing market.

Trust Bank three weeks ago received 7 billion rubles ($260 million) in emergency funding from the state banks.

It is also on approved list of banks that can tap the state development bank VEB, although the bank declines to say whether it has applied for additional funding.

Trust's main shareholders are Russia's Ilya Yurov, Nikolai Fetisov and Sergey Belyaev, who control about 80% of the holding group's shares. U.S. bank Merrill Lynch bought a 10% stake in the bank a year ago.

The holding company comprises of National Bank Trust, one of the leaders in retail banking with a presence in 200 cities across Russia, and Trust Investment Bank, a mid-tier broker.

BNP first arrived in Russia in 1974, but has made less impact than French rival Societe Generale (13080.FR), which boosted its stake in local bank Rosbank to more than 50% in February. It unsuccessfully bid for Russian Standard Bank, the country's leading consumer leader, in 2005. The French bank is rumored to have looked at buying Moscow brokerage Antanta Capital and Glitnir's Russian operation.

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