BNP Paribas eyes Sberbank venture in Russia

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BNP Paribas will scale back its retail banking division in Russia to focus on the consumer credit sector through a venture with the state lender Sberbank, a spokesman for the French giant said Monday.

"BNP Paribas has changed its development priorities," BNP Paribas spokesman Dmitry Borshchevsky said.

"We are in active negotiations with Sberbank for the creation of a partnership in the on-site consumer credit sector," he said.

In June, the two companies announced a partnership through a subsidiary of BNP Paribas called Cetelem. The French bank's retail activity in Russia will be "adapted" to the new project, Borshchevsky said.

The bank's Russian retail business is now limited to 26 branches, although it provided credits to more than 430,000 clients, the spokesman said.

Retail clients of BNP Paribas will be asked to transfer their business to other lenders, he added.

Several foreign banks have pulled out of Russia in recent months, discouraged by a saturated retail market and a difficult business environment for foreign investors.

In April, HSBC announced its pull-out from Russia a few weeks after Barclays closed its business. Swedbank, KBC, Morgan Stanley and Spain's Santander have all either left or are leaving Russia in the coming months.

© 2011 AFP

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