RI in Russia
WHAT'S News Issue 6 June 1997
info exchange
13
Last year saw the opening of a rep office in the Russian capital. At the
time, there were ambitious plans for development, but the key to what
could be a potentially very attractive market for RI was having the right
people on the spot. Earlier this year, Alexey Belyayev and Rodolphe
Evangelisti were recruited to man the office. What's NewS caught up with
them at a special 'Russia day' organized specifica11y to assist our new
colleagues in building their network.
Although Belyayev and Evangelisti talked
the 20-plus audience through current
economie situation, competition and
opportunities in the Russian market and
both Guus Rozendaal (country limits) and
^^erard van Empel (RIAS) made brief
presentations, this was no formal or
passive event. 'It is a new approach to
enabling new colleagues to create
networks,' confirms NDS's Bram Kruimel.
'The idea is that we all meet together and
exchange information and knowledge that
could be useful to other people working in
the same or similar fields elsewhere in the
bank. But this afternoon was definitely
designed to make sure Alexey and
Rodolphe start off with a solid base here
at Utrecht branch and in head office.'
RESTRUCTURING MARKET
The meeting was very much a transfer of
knowledge. Over recent months, the
Moscow team - which includes Lena
Koubanova - had put together a paper
«vhich provides a succinct, but clear
l'erview of what is happening in the
Russian market. 'I think the important
thing to remember,' says Evangelisti, 'is
that the Russian market is not an
emerging market, but rather is undergoing
restructuring. So you must look at it in
that way. Plus, it has some of the world's
highest reserves of natural resources, such
as oil and natural gas, copper and nickel,
iron, gold and diamonds.'
SIGNS A LIFE
At the same time, after a period of real
economie instability and political
uncertainty, Russia appears to be refinding
its feet. 'It is true that the past few years
have been tough,' confirms Belyayev, 'but
in spite of glaring imperfections and
abuses, in spite of real hardship and
insecurity, the majority of Russian voters
want to preserve the reforms which have
pushed through the transition to
democracy. I think the reality today is that
there is still political struggle in Russia,
but the struggle is now within the system
and not about the system. This is one
reason why our economy is starting to
show signs of life.'
GOOD NUMBERS
The numbers are very promising -
inflation has fallen sharply from 135 to 22
percent in 1996. Russia's deficit is 3.3
percent of GDP in the 1997 budget
against 7.7 last year. Annual interest rates
feil from 120 to 36 percent, which is
encouraging growth. The ruble is stable,
and growth looks possible for the first
time in four years. Russia's budget is now
financed from cash instruments, not in
money surrogates, such as promissory
An introduction
about the Global
strategy for
Rabobank in Russia.
RI IN RUSLAND
Vorig jaar opende RI een
vertegenwoordiging in
Rusland.Tijdens een
'Ruslanddag'onlangs in Utrecht,konden
onze Russische collega's hun netwerk
uitbreiden. Wij spraken Alexey Belyayev en
Rodolphe Evangelisti over hun
verwachtingen. 'Ik denk dat er nog steeds
een politiek gevecht in Rusland gaande is,'
zegt Belyayev. 'Maar het gevecht is nu
binnen het systeem in plaats van óver het
systeem. Dit is een van de redenen
waarom onze economie nu levenstekenen
vertoont.'
notes, and - the icing on the cake - Russia
has received an international credit rating
- BB-.
NICHE ADVANTAGE
Given this environment, and an
increasingly well regulated financial
services sector - not least as a result of the
appointment of a strong chairman to the
Russian Central Bank, Dubinin - Russia
appears to be a - very huge - land of
opportunity. 'There are areas where we
really could make a difference,' says
Evangelisti. 'The banking environment is
extremely competitive, but all the Western
banks - and there are a lot of them - are
focusing on fairly obvious areas, such as
oil and gas. No one is looking at F&A,
except for some focus on the retail sector.
If we can maintain our niche strategy in
F&A, then this could represent a real
competitive advantage for us. Agriculture
is a priority with government - national,
regional and local. Our expertise could
add great value, especially in sectors like
logistics and storage.'
PROBLEMS AND PROFITS
Says Belyayev: 'Margins elsewhere are
under pressure, but in F&A they are still
high. As a dedicated F&A bank there are
in fact no limits to what we can do - all
products and specializations, such as
syndication, M&A, forfeiting, trade
finance - there really are numerous
opportunities.' But neither Belyayev, who
is a Russian national, nor Evangelisti, who
was recruited from Paribas in Moscow,
disregard the risks. 'No one is saying there
are no problems in Russia,' Belyayev says
frankly, 'there are certainly dangers and
risks. But we would argue that these are
management risks. If we are very cautious
and apply the kind of risk management
that has made Rabobank a triple-A
organization, then all activities are not
only very possible, they could also prove
very profitable.'