Zee Beam News

MOSCOW, February 11 (RIA Novosti) – Russia's finance minister spoke positively Saturday about the role of foreign capital in Russian banks, but reiterated the government's position that it should remain limited. Alexei Kudrin said: "I welcome the arrival of foreign capital in Russian banks, but on the terms of affiliate banks in Russia and given that they operate within the framework of Russian legislation and present their financial statements to the Central Bank." Russian experts have consistently argued that the sector remains too weak to allow foreign financial institutions to open their own branches under current legislation in the country. Kudrin singled out the recent acquisition of Impexbank by Austrian banking group Raiffeisen International. "This is an absolutely normal process," he said. "Russian banks are going through a certain capitalization and are becoming increasingly attractive." Raiffeisen said Wednesday it was seeking to buy a 100% stake in Impexbank for $550 million provided the deal is approved by the Central Bank of Russia, as well as Russian and Austrian regulatory authorities. Raiffeisen will make the payment in two tranches. The first, up to $500 mln, will be released after the audited financial results for 2005 are presented, and the second, up to $50 mln, will be contingent on 2006 financials. The $550-mln price tag on the deal is the maximum, but it could be revised following a revaluation of real estate, according to the Austrian group.