Foreign Bank Presence Grows
- By Geoff Winestock
- Feb. 17 1993 00:00
Dresdner Bank AG of Germany and Banque Nationale de Paris, the two banks involved in the deal, are part of a field of at least 10 foreign banks trying to enter the Russian market.
Western banks have been attracted to the Russian market both for its long-term prospects and in the short term to provide much-needed competition for Russian banks with their high fees for basic services.
The decision by the Central Bank comes despite strong opposition from the Russian banking lobby at a decision last year to grant a license to Credit Lyonnais of France.
Credit Lyonnais expects to open its first office in St. Petersburg in months. Bank Austria was allowed to establish a branch in Moscow with a more limited license. Dialog Bank and the Moscow International Bank have been established on a joint-venture basis.
Jurgen Woller, chief representative of Dresdner Bank, said that under the letter of intent signed last Friday the Central Bank agreed to issue a general banking license within a year. He said the bank would have working capital of between $5 and $10 million.
Dominique Menu, chief representative of Banque National de Paris, said foreign investment in the banking sector was still a political issue but he expected the letter of intent to be fulfilled. "I don't think the Central Bank would have signed if they did not think so", he said