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. Last Updated: 07/27/2016

City Bank Offers Services to Siberian Accord

The city government-owned Bank of Moscow is bidding to create an inter-regional banking center to service accounts and extend credits to a powerful association of regional bosses and manufacturers from Siberia, bank officials said Thursday.

In a move that may signal Moscow Mayor Yury Luzhkov is upping the stakes in his campaign to seal a tight electoral alliance with regional forces, the Bank of Moscow announced Thursday it will offer its services to the 19 regions in the association, known as Siberian Accord.

The association approved a partnership deal with the bank's Novosibirsk branch Thursday, while forwarding the proposal for servicing the remaining regions for further discussion, said Andrei Sudakov, first vice president of Bank of Moscow.

The bank intends to provide a full range of banking services, including a transfer system between Moscow and the regions. It will also set up credit lines for investment projects and attract investors to the regions, he said after signing off on the Novosibirsk deal, in remarks reported by Prime-Tass.

Representatives of Bank of Moscow contacted Thursday refused to comment further on the deal, saying that negotiations with the association, which is headed by the influential governor of the Sverdlovsk region, Eduard Rossel, are still continuing.

Aides to Rossel at the Federation Council were unavailable for comment.

Siberian Accord obviously carries plenty of political weight. Newly appointed acting Prime Minister Vladimir Putin flew off to the Siberian city of Tomsk on Thursday for his first mission outside Moscow since assuming the post. Putin was scheduled to meet with senior representatives of Siberian Accord in a thinly disguised attempt to coax regional leaders back to the Kremlin's side.

Analysts said the Bank of Moscow's courtship of the governors so soon after Luzhkov signed a pre-election coalition with the All Russia group, a powerful configuration of regional leaders, could be part of the mayor's campaign for the parliamentary elections.

"This kind of deal would be good for Luzhkov and good for the regional governors," said Margot Jacobs, a banking analyst with United Financial Group."

All the governors are looking for more political support as election time comes up. If they can get the Bank of Moscow to give them working capital for investment projects to improve the local economy, then their political clout can only grow," she said. "It would greatly improve their chances of election."

But political analyst Yury Korgunyuk, of the INDEM think tank, played down any connections the deal may have with Luzhkov's electoral power brokering.

"Bank of Moscow is one of the very few banks that has branches in the regions. The only other bank they could use is Sberbank," Korgunyuk said.

Siberian Accord formerly made use of the banking services of Uneximbank, Inkombank, Tokobank and Rossiisky Kredit until last August's crisis rendered these former banking powerhouses lifeless.

"Sberbank is not the most flexible, financially oriented institution," Jacobs said. "So a partnership with Bank of Moscow may not signal a complete about-turn for the association. But the group's ties with the governors seems that the bid is connected to the All Russia coalition."

The governor of the Novosibirsk region, Vitaly Mukhi, said the Bank of Moscow made a direct proposal to the regional administration on the deal. The association, however, is ready to take offers from other major banks, apart from SBS-Agro, Prime-Tass quoted him as saying.

SBS-Agro was placed under temporary management this week.

The Bank of Moscow has branches in the Siberian regions of Buryatia, Khakassia, Krasnoyarsk, Kemerovo, Novosibirsk, Omsk and Tomsk.