One of Russia’s largest privately owned banks, Promsvyazbank, says it mulling over expanding operations into Kenya as it seeks to tap new East Africa deals.
Alexander Meshcheryakov, head of transaction, documentary and international businesses at Promsvyazbank — Russia’s 10th largest bank by assets — told news agency Reuters the lender is studying Kenya and other African countries ahead of a possible decision to venture into the country.
“There is growing interest in Africa among (Russian) clients,” Mr Meshcheryakov said. “Many clients come to us with this topic and ask to help them with financing projects in the region.”
Oil-rich Russia’s banks and firms have invested billions of dollars abroad since the fall of the Iron Curtain.
Trade between Russia and Kenya is, however, relatively limited, totaling around $200 million (about Sh20.7 billion) per year. Kenya purchases a significant amount of Russian arms and is exploring the market for its bulk tea.
Mr Meshcheryakov said the lender is also studying business opportunities in neighbouring countries of Tanzania, Uganda, and Rwanda as well as Zambia, Nigeria and other countries.
“Africa is basically one of the fastest growing regions and could be the only economic region that has not yet unlocked its potential ... From a growth point of view, it’s likely to be the most promising one on the world map,” added Mr Meshcheryakov.
Promsvyazbank, majority owned by long-established Russian bankers and billionaire brothers Dmitry and Alexei Ananyev, focuses on lending and maintaining accounts of corporate clients. The lender has also been rolling out retail business.
With its Kenya expansion plans, Promsvyazbank will join another Russian bank already operating in Kenya, Renaissance Capital. Investment bank RenCap has offices in Kenya, Nigeria and South Africa.
Other lenders on the continent are state-owned VTB and Gazprombank.
Russia’s second biggest bank, VTB opened its subsidiary VTB-Africa in Angola in 2006, focusing mostly on corporate and investment banking but also featuring a small retail division for its clients’ employees.
Gazprombank Africa, a branch of Russia’s third largest lender Gazprombank, has had operation in South Africa since 2014.
Several international banks want in. New York-based lender JPMorgan Chase is among the lenders.
Recently SBM Holdings, Mauritius’s second-biggest lender, acquired Fidelity Commercial Bank and has kicked off expansion in East Africa.
Gulf’s Dubai Islamic Bank recently entered the market.