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. Last Updated: 07/27/2016

Foreigners See Investment Future Here

Credit Swiss bank and Credit Swiss First Boston investment company opened subsidiaries in Moscow on Thursday, in a move that confirms the growing interest of Western financial institutions in Russia's markets.

"We are building for what we believe will be one of the world's great economic and financial markets," David Mulford, chief executive of CS First Boston, said at the opening ceremony.

Boris Jordan, director of the CS First Boston Russia, said international financial institutions had invested close to $2 billion in Russia since the beginning of 1994. Anatoly Chubais, Russia's privatization chief, has named CS First Boston as one of the largest buyers of shares in Russia's privatized companies.

"There is significant demand for Russian securities and we estimate that the investment portfolio will rise substantially in 1995," Jordan said.

Rudolf Hug, a director of Credit Swiss, said Credit Swiss Moscow would concentrate its activities on commission business, hard currency and ruble transactions, funds transfer, trade financing and credit services. He pointed out that the bank's services were primarily aimed at local companies and banks, as well as retail customers.

He said that it would take three years for the bank to recoup its investment, adding that he was sure that was possible.

"There are enormous opportunities here," he said.

Credit Swiss and CS First Boston, sister companies within the Swiss company CS Holding, were among the first Western financial institutions to come to Russia after the Cold War.

Credit Swiss Moscow is one of just 10 foreign banks that were lucky enough to obtain a full banking license before a Nov. 15, 1993 decree restricted the access of foreign banks to the Russian market.

Under an agreement with the European Union the 10 banks are allowed to serve Russian companies and individuals, while other foreign banks are allowed to have only foreign companies and individuals as clients until 1999.

But a Moscow banker, who asked not to be named, said he doubted whether Credit Swiss would seek to provide services to Russian firms and individuals, adding that the Swiss bank planned to have no more than 100 clients.

"But they are very strong and if they decide to take away accounts from Russia's industrial elite, especially exporters, they will create problems for many Russian banks," he said.

CS First Boston has acted as an advisor to the State Property Committee that governs the privatization of Russian industry and is currently working with major Russian companies to raise foreign capital, Mulford said.

According to Mulford, CS First Boston is the nominee shareholder of 5 percent of stock in Lukoil, Russia's largest independent oil company.