Alfa Revamps Retail Network.
11 Dec 2001
By Torrey Clark.
Top five commercial bank Alfa Bank is overhauling its retail system and focusing on the regions in order to increase its independence from Alfa Group - not to groom it for sale, Alfa Bank chairman Mikhail Fridman said Monday.
"We are trying to seriously weaken the link [between Alfa Bank and Alfa Group]. We don't want to be perceived as a bank that only serves the interests of Alfa Group," said Fridman, who is also head of Alfa Group.
To become more independent, "we are trying to widen the spectrum of services, including retail," he said. The bank plans to increase its deposit base from $2 billion in 2001 to $4.5 billion by 2004, said Yevgeny Bernshtam, Alfa Bank's first deputy chairman.
In a bid to cut costs and pull some of its loss-making retail branches into the black, Alfa Bank plans to open a network of low-cost mini-offices across the country. These offices would offer streamlined services aimed at small businesses and individuals.
Up to 10 such offices should be opened in Moscow next year, said Maciej Lebkowski, Alfa Bank's director of retail development. Lebkowski implemented a similar plan at Poland's Handlobank, which the Citibank group has since acquired.
Fridman said there are no plans to sell the bank because a suitable buyer - most likely a foreign bank that could offer a suitable price - is unlikely to show strong interest in the Russian banking sector in the near future.
"We would of course agree if, for example, Citibank offered to buy Alfa Bank for $1 billion," he said. "But that won't happen for at least two or three years."
The bank has been looking to sell a stake for some time, analysts said.
Fridman said the bank is planning beyond just the next year. "Whether [the plan is] to pave the way for eventual sale of a turnkey network or to take advantage of potential improvements in the banking sector remains to be seen," said Kim Iskyan, an analyst at Renaissance Capital.
"It is interesting that Alfa and MDM [Bank], which are competitors, are doing the same sort of things - that is, their strategy is to build up a retail network," said Richard Hainsworth, general director of RusRating. "They seem to believe numerous problems standing in the way are going to be removed."
Fridman also said the bank is considering a Eurobond issue of "no less than $175 million" within the next two years. He called the $20 million syndicated loan the bank was granted by Western banks on Friday "the first step toward a Eurobond."
"This is the first step for banks to regain a semblance of respectability," Iskyan said.
Gazprombank placed a 150 million euro Eurobond on Friday, the first for a Russian bank since the 1998 crash.
(c) 2001 Independent Press.
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