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. Last Updated: 07/27/2016

Deutsche Bank Opens Branch as Trade Grows




A 30 percent jump in trade between Germany and Russia was the motivating factor behind Deutsche Bank's recent decision to open a Moscow subsidiary, the local bank's chairman said.


But Hubert Pandza said his bank, which played the leading role in negotiating a restructuring of $32.3 billion in loans owed by Russia to the London Club of commercial creditors, has been planning the move for a long time.


"This was not a spontaneous decision, but the result of a long process," he said in a recent interview.


Deutsche Bank opened its local branch -- upgrading from a representative office, which the bank has had in Moscow since 1973 -- about two weeks ago. It will have capital of $50 million and a staff of 150.


Pandza said the most important factor necessitating a local branch office was the sharp growth in trade between the two countries, which shot up by almost one-third in 1997. Seeing a rise in German companies investing in Russia, the bank had no choice but to go local, Pandza said.


"Given our position in Germany, there was no way but to consider coming into this country," he said. "Otherwise they [German companies] would have to work with our competitors."


Pandza said a lot of trade between the two countries is currently being handled by Russian banks, and that Deutsche Bank sees a strong potential to work with these banks.


"We would like to become a local bank," he said. "We prefer to work with Russian colleagues, including on the board [of managing directors]."


Pandza said the bank had offers to buy into Russian banks and was seriously considering some of them. "We have to think about the future in our activities," he said.


Deutsche Bank's work with the Russian government on the London Club debts has paid off in its relations locally, Pandza said.


"The London Club [settlement] was very hard work for us, from 1991 to 1997, and this was recognized by the Russian government," Pandza said. "The settlement was a precondition for Russia to join the international capital market again."