By ABCafrica reporter
Russia’s largest privately-held banks; Promsvyazbank, is looking to the Ugandan market as part of its African plan to expand its business, a senior executive told Reuters. “There is growing interest in Africa among (Russian) clients,” Alexander Meshcheryakov, head of transaction, documentary and international businesses at Promsvyazbank, said. “Many clients come to us with this topic and ask to help them with financing projects in the region.”
To cater to its clients’ needs, Promsvyazbank, Russia’s 10th largest bank by assets, is now studying business opportunities in Kenya, Nigeria, Rwanda, Tanzania, Uganda, Zambia and other countries, Meshcheryakov said in an interview.
With its Africa expansion plans, Promsvyazbank will join other Russian banks already operating in the region, such as VTB, Gazprombank and Renaissance Capital. Russia’s second biggest bank VTB opened its subsidiary Bank VTB-Africa in Angola in 2006, focusing mostly on corporate and investment banking but also featuring a small retail division for its clients’ employees.
Gazprombank Africa, a branch of Russia’s third largest lender Gazprombank, has been based in South Africa since 2014. Investment bank Ren Cap has offices in Kenya, Nigeria and South Africa. “In the future we expect that the ‘Made in Russia’ tag would be regarded as decent and worth the money,” Meshcheryakov said. Promsvyazbank has already signed an agreement with the African Export-Import Bank, also known as Afreximbank, and is setting up contacts with certain governments, Meshcheryakov said.
For now, Promsvyazbank will focus on financing projects in Africa, but may eventually consider opening a branch there, he said. Meshcheryakov said; Africa’s economies are predicted to grow faster than the global economy over the next decade as they try to attract foreign investors with tax breaks and guarantees.
“Africa is basically one of the fastest growing regions and could be the only economic region that has not yet unlocked its potential … From a growth point of view, it’s likely to be the most promising one on the world map.” The economies of the African countries targeted by Promsvyazbank will grow by 4-7 percent a year by 2019, according to World Bank estimates. This is in contrast to Russia’s economy, which, emerging from two years of contraction, is forecast to expand by less than 2 percent in 2017.