VIMPELCOM, ALFA ECO STILL TALKING ABOUT DEAL TO FACILITATE EXPANSION

Russian cellular firm VimpelCom and potential local strategic investor Alfa Eco said they were still in talks on a potential deal to facilitate regional expansion, according to a Reuters report.

VimpelCom's head of investor relations, Valery Goldin, and the head of Alfa Eco's telecoms arm, Stanislav Shekshnya, confirmed that negotiations were continuing.

Andrei Kosogov, first deputy chairman of Alfa Bank's board, told a news conference that the bank had been in negotiations with VimpelCom but had backed out, limiting its Russian telecoms investments to a financial stake in Golden Telecom. Moscow media then reported that Alfa Group had abandoned talks with VimpelCom.

Alfa Group comprises numerous units of which trading arm Alfa Eco and Alfa Bank are two. "People at this press conference mistook Alfa Bank for all of Alfa Group. We are not in negotiations with Alfa Bank. We issued this statement so as not to confuse the market," Goldin said.

VimpelCom is seeking a strategic investor for its regional expansion arm and says it needs about $300 million.

Its chief competitors, Moscow-based Mobile TeleSystems and the Telekominvest holding in St. Petersburg, have also laid out aggressive plans to conquer Russia's largely untapped regional cellular markets.

Alfa Bank announced recently that it had bought a 44 percent stake in Golden Telecom, a Moscow-based carrier. Alfa Bank's Kosogov said that would be the end of Alfa Bank's telecoms investments.

PETERSBURG'S PROMSTROIBANK MERGING WITH METKOMBANK OF CHEREPOVETS

The St. Petersburg Promstroibank and Metkombank in Cherepovets announced this month the start of a merging procedure, according to a Novecon report citing Vremya Novostei.

Metkombank, the main settlement bank of the Severstal steel company, which holds an 80 percent stake in it, will hand over its business and branches to Promstroibank and act as an agent for financing Severstal programs, the report said.

In return, Severstal will get 10 percent of Promstroibank shares and the company's general director, Alexei Mordashev, will take a seat on the bank's supervisory council, according to Novecon.

However, analysts cited by the report said that the deal was skewed – pointing out that Severstal could have asked for twice as much as it did. Nevertheless, they noted that Severstal went in for the deal because of Mordashev's desire to get support from Vladimir Kogan – influential head of the Promstroibank supervisory council – in his confrontation with Siberian Aluminum.

As of Jan. 1, 2001, Metkombank and Promstroibank had net assets of 5.6 billion rubles and 23.9 billion rubles and a credit portfolio of 914 million rubles and 10.1 billion rubles, respectively, the report said.

RUSSIAN BANKS NAMED IN U.S. AID PROGRAM

Last week, the U.S. government named Russian banks for participation in the GSM-102 global specialized assistance program for American produce exporters, according to Novecon citing the Kommersant daily.

The list includes Alfa Bank, Vneshtorgbank, MDM-Bank, Moscow Narodny Bank, Probusinessbank and Sberbank; the program for Russia is set at $40 million and the banks will be able to issue loans within the limits of their credit lines, the report said.

ALFA BANK ESTABLISHES A U.S. SUBSIDIARY FOR BROKERAGE, INVESTMENT SERVICES

Moscow-based Alfa Bank has set up a subsidiary, Alfa Capital Markets Inc., in the United States to provide brokerage and investment services to clients and investors in the United States, Canada and Latin America, Interfax reported.

The new company will specialize in portfolio investments and consulting for corporate clients on direct investments to Russia, the news service said. It added that another Alfa Bank subsidiary based in London, Alfa Securities, began providing similar services to EU countries under a license from SFA of Britain.

FOREIGN BANKS SERVE 12% EX/IMPORT NEEDS, RAIFFEISEN OFFICIAL SAYS

Foreign banks with subsidiaries in Russia currently serve 12 percent of all export and import needs of Russian enterprises, said Levan Zolotarev, vice president of Austria-based Raiffeisen Bank's Russia operations, according to the Comtex news service.

"Foreign banks play a very important role in the Russian banking system due to the fact that they bring foreign capital into the Russian economy," he said in the report, but added that foreign banks generally are unable to serve giant Russian companies – such as LUKoil, Yukos and Sibneft – because each bank is limited to only one of such borrowers.

ALFA BANK ACQUIRES NETHERLANDS BANK

Alfa Bank announced it has acquired a 100 percent stake in Amsterdam Trade Bank N.V. (ATB), previously belonging to SBS-Agro, for roughly $10 million – taking into account the additional capitalization necessary for the Amsterdam bank, according to Interfax.

Acquiring ATB will enable Alfa Bank to carry out banking operations in the Netherlands, the report said.

Amsterdam Trade Bank, the only subsidiary bank with private Russian capital in the European Union, has the potential to open branches in any EU country, the company said in the report, which also noted that the Russian bank was able to acquire Amsterdam Trade Bank only after receiving approval from the Dutch Central Bank and Finance Ministry.

Amsterdam Trade Bank shares were arrested in 1998 when SBS-Agro failed to meet its obligations to creditors, Interfax said, adding that in October 2000, Amsterdam's district court ruled in a case filed by six foreign SBS-Agro creditors that the Amsterdam bank's assets should be arrested and sold. The court set a minimum price of $10 million.

Alfa Bank already has subsidiaries in the United Kingdom and the United States, said the report.

VNESHECONOMBANK REFORM PROCEEDS

Reform at Vnesheconombank, which will include a partial merger with Roseximbank, should be complete by Dec. 31, a source close to the government told Interfax.

This deadline will be indicated in a government resolution, Interfax said in a report, adding that government instructions and a presidential decree are also being drafted.

"The banking functions and assets of Vnesheconombank are to be transferred to Roseximbank, after which Vnesheconombank will be restructured into the federal state unitary company Russian Debt Agency," the source said in the report. After the merger, Roeximbank will be renamed Vnesheconombank Russia and will have charter capital of $800 million-$900 million.

The main issues in dispute are the division of the balance, the status of the new bank and the status and authority of the debt agency, the source told Interfax.

For example, it is still not clear whether it would be sensible to give the new Vnesheconombank the function of payment agent for state foreign debt servicing, the report said.

"The function of the payment agent could go to the debt agency or a tender could be held to chose an agent," the source said.

MENATEP ST. PETERSBRUG IN MONGOLIA

Menatep St. Petersburg will open an affiliate in Ulan Bator, Mongolia, in the second quarter of this year, the bank said, Interfax reported.

The central bank in Mongolia informed Russian Central Bank chief Viktor Gerashchenko that it has given preliminary approval for the affiliate, according to the report.

The affiliate will work with Russian oil and gas and transport companies, gold mining companies and Russian-Mongolian joint ventures in Mongolia, the report said.

Menatep St. Petersburg on Jan. 1 had a balance sheet of 30.935 billion rubles, equity capital of 2.674 billion rubles, and closed 2000 with a pretax profit of 616 million rubles, according to Interfax, which added that the bank was 14th on its list of the country's 100 biggest banks for 2000.

BALTIISKY ASSETS UP 7.3%

Baltiisky Bank assets increased by 7.3 percent in January and February to 4.049 billion rubles on March 1, a company source said, according to Interfax.

Equity capital increased by 9 percent in the period to 385.6 million rubles and pretax profit for the first two months was 29.128 million rubles, the news service said in a report.

The bank had a loan portfolio on March 1 of 3.088 billion rubles, 15.4 percent more than at the start of the year, the report said, adding that the bank's biggest borrower is its biggest stakeholder – Oktyabr Railroad, and other transport and freight-forwarding enterprises.