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. Last Updated: 07/27/2016

U.S. PR Advocates Put Case to Bankers

The Russian banking sector has a problem, and Michael Geczi and John Dillard are here to help.

Specifically, the sector's image has suffered abroad in recent years, gaining a reputation for corruption and unreliability that has made foreigners wary of trusting Russian banks with their money.

Standing before an audience of skeptical Russian bankers Tuesday, the two public relations specialists from the U.S.-based Sitrick & Company in partnership with Imageland Public Relations, made their pitch for a $580,000 per year contract to solve the Russian banking sector's image problem.

Sitrick & Company advertises itself as specializing in "sensitive assignments" and "image-rebuilding campaigns."

Services provided would include media relations, advertising, placing bylined op-ed pieces in Western newspapers, staging PR events, and constructing an interactive web site for those curious about Russian banks.

However, banking analysts said that the sector was so weak that a slick image campaign would do little good without fundamental improvements in the industry.

"It would be better for the Russian banks to get their house in order first before telling the world how good they are," said Richard Hainsworth of Thomson Financial BankWatch, an international bank rating agency.

"Foreign banks who have dealings with Russian banks understand that credit ratings will be low, but they want to be sure that they are dealing with a legitimate bank with an established business, and good business practices," he added.

"It is more important for a bank to earn its reputation within Russia, because the people that matter will come here and learn about it anyway from local sources."

Some of the bankers in the audience appeared to share the analysts' skepticism.

"In my opinion, what they write about us in Western papers is better than the reality of what really goes on in the Russian banking sector - maybe it's better just to keep quiet," said one of the audience members.

Others balked at the $580,000 per year price tag of the proposed campaign.

In response, Dillard suggested that the Russian Banking Association explore other options, such as going to USAID, the European Bank of Reconstruction and Development, or TACIS, the European Union's technical aid arm, for financial assistance.

While unlikely to foot the entire bill, these organizations "would be very interested if you came to them with this project and said, 'We have put $250,000 together, but it is not enough,'" Dillard said.

"We'll tell you who to speak to," he added, noting that his firm had previously worked on USAID contracts to create a good reputation for market reform in the former Soviet republics of Ukraine and Moldova.

Geczi argued that many of the banking sector's image problems in fact stem from negative perceptions of Russia itself, not directly related to the banking sector.

Kim Iskyan, a banking analyst with Renaissance Capital, disagrees.

Asked to comment, he said that in fact Russian banks had succeeded in creating an image of stability and responsibility, but that their behavior since the 1998 financial crash had tarnished that image almost beyond repair.

"What they were good at before was creating a good, sound image for themselves, with fancy nameplates and impressive corporate buildings," he said.

"They violated all trust [after the crisis]. If Russia has a negative image, the behavior of the banking industry is a major reason for that."