MOSCOW (Reuters) - Raiffeisenbank, the Russian arm of Austria’s Raiffeisen Bank International, is looking to expand in Russia despite sluggish economic growth, finance chief Gert Hebenstreit said.
Raiffeisenbank this week reported a 25 percent increase in 2017 net profit and 13.6 percent growth in its loan portfolio.
“We exceeded the market, state-owned banks, in terms of growth in 2017. And we will see whether we do this in 2018, but for sure we want to grow quite substantially in the next three years plus,” Hebenstreit said in an interview with Reuters.
Russia’s banking sector has undergone a massive shake-up, with the central bank forced to rescue three major private banks in 2017 and shutting hundreds of smaller lenders in recent years.
Banking has also been hampered by a fragile economic recovery after a recession, sparked in 2014 by a drop in oil prices and Western sanctions against Russia for its role in the Ukraine crisis.
The current banking environment is “challenging”, Hebenstreit said, due to poor demand for investment in the private sector.
“You will not see footprint growth like you saw several years ago when traditional banks were growing. But you will definitely, hopefully, see us growing our customer base across Russia in the next years. This is our plan,” Hebenstreit said.
Russia’s 13th largest bank by assets, Raiffeisenbank, entered the Russian market in 1996.
It was among the first foreign banks to enter Russia following the Soviet Union’s collapse. It now has more than 180 branches and operates through around 20,000 ATMs from Kaliningrad in the west to Irkutsk in eastern Siberia.
Along with expanding the customer base, Raiffeisenbank is considering tapping the rouble bond market in 2018 due to “strong investor appetite” as its existing bonds mature later this year, Hebenstreit said.
Raiffeisenbank has no plans to expand by buying a smaller rival but would not rule out purchasing a bank’s loan portfolio, he said.
Reporting by Andrey Ostroukh; editing by Andrew Bolton