Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Bank Austria Going Russian

Bank Austria officials said Thursday they will expand their bank's position in the Russian market beginning April 1, when they begin operations as a fully-licensed Russian bank, cancelling their previous status as a branch office.


But Alejandro Eduardoff, manager of the Bank Austria branch in Moscow, denied that foreign customers would turn tail upon hearing that their accounts will be subject to Russian banking law.


For the last five years, Bank Austria has operated in Moscow under a limited license, by which it has offered corporate and personal accounts to western representative offices and individuals but has been prohibited from serving Russian customers.


As a Russian-registered subsidiary, the bank hopes to expand its customer base and activities without losing its traditional niche.


New services "include the opening and maintaining of accounts for residents and the full scope of operations in Russian rubles, as well as lending and securities products while maintaining the same basic banking services," the bank said in a statement to account holders.


"We will be serving resident customers, and moving onto the securities and credit markets," said Eduardoff. "At the same time, we are confident that our current customers will stay with us."


Eduardoff said that fear of the Russian tax authorities was not an issue for the foreign customers who use the Bank Austria branch. He said that he expects they will keep their accounts when the branch becomes a subsidiary.


"Most of our branch customers are foreign blue-chip companies and their executives," he said. "They know that people working here have to register with the Russian tax authorities and that if they are registered they have nothing to fear."


Accounts that are not closed or transferred to the new subsidiary will be automatically transferred to the headquarters of the bank in Vienna. Customers banking from the Vienna headquarters will be unable to access their accounts through the Moscow subsidiary.


According to Central Bank spokeswoman Tatyana Chapligina, more than 10 foreign banks have licenses to do business in Russia or are applying for licenses. They include American, French, German and Swiss banks, as well as the Bank of China.


Bank Austria plans to increase staff and move from its current premises to a larger site near the Tretyakov Gallery in Central Moscow at the end of the year.