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. Last Updated: 07/27/2016

Citibank to Enter Leasing

Citibank Russia has revealed plans to enter Russia's rapidly expanding leasing market, citing burgeoning demand from local manufacturing companies.

The bank announced Monday the registration of its subsidiary CitiLeasing. The company has $50,000 in charter capital and is planning to increase it by a further $2 million in the next two to three years. CitiLeasing will offer Russian customers asset-based financial services including long-term leasing of fixed assets.

"There are already many leasing companies in Russia, but demand for such services is growing, as most Russian producers have to modernize their outdated equipment," a Citibank representative said.

"In the lack of long-term investment credits from Russian and foreign banks, Russian companies have to look for other financial schemes -- and leasing is probably the best," the Citibank representative said.

Other foreign companies have already enjoyed the fruits of Russia's fast-growing leasing market.

For example, DeltaLeasing, a part of Delta Capital Management (formerly The U.S.-Russia Investment Fund) has doubled its leasing portfolio in 2002, reaching $20 million.

The company, which signed a $10 million loan agreement with the EBRD this year, is currently working with more than 100 suppliers of equipment and provides financing from $25,000 to $500,000 for up to five years.

More than 75 percent of its customers and medium and small-sized companies, employing around 100 people.

Germany's Deutsche Leasing Vostok has also been operating in Russia since 1999. The company had charter capital of $3 million with $600,000 provided by International Finance Corporation, part of World Bank.