KBC and Absolut Bank to Detail Expansion Strategy in Russia
OREANDA-NEWS. During an upcoming joint press conference in Moscow, Mr Andrй Bergen, KBC Group CEO, and Mr Nikolay V. Sidorov, Absolut Bank CEO, will explain and detail their plans and initiatives for the Russian market, the bank's press-service informs.
Currently, Absolut Bank has 50 branches and is present in 18 regions. It is the intention of both KBC and Absolut Bank to (initially) increase the number of branches to around 130 and to increase the number of regions in which the bank has a presence to around 25 by the end of 2010. In addition, Absolut Bank aims to increase its market share in each region where the bank is present. Absolut Bank will accordingly continue to actively recruit new staff members both for its head office and for the regions in the years to come.
Andrй Bergen, KBC Group CEO, said: "It is KBC and Absolut Bank’s ambition to become a leading player in the retail, SME and mid-sized corporate segments in Russia. To this end, KBC will build upon the local management team, strengthening it with KBC management and experience. KBC is in the process of enhancing Absolut Bank’s already strong risk governance by applying its own high standards. KBC is fully committed to supporting the growth of Absolut Bank in terms of deeper regional penetration and cross-selling to the customer base. KBC is also ready to provide capital support and intercompany funding over the next few years. This clearly underlines KBC’s strategy of being a committed shareholder and partner for Absolut Bank in the fast-growing Russian market. Together, we want to ensure the growth and future of Absolut Bank for the benefit of retail and corporate customers, employees and shareholders."
Absolut Bank is one of the most successful privately owned banks in Russia. It is a well managed, fast-growing bank that constitutes an ideal platform for KBC’s long-term presence in this dynamic market. KBC wants to build on the local strengths of Absolut Bank and to contribute its expertise and resources.
The business plan of Absolut Bank for the 2007-2010 period focuses on developing the banking business in the retail and SME segments, as well as in the mid-sized corporates segment. The key focus in terms of products will remain on mortgages, car loans and credit cards for the retail segment, and on trade finance, working capital and term loans for the SME and mid-sized corporates segments. KBC and Absolut Bank expect that the proportion of retail business in the total business mix will increase from about 30% currently to around 45% in three years’ time.
Absolut Bank is a mid-sized, universal bank headquartered in Moscow, with total assets of 2.3 billion euros (1H2007) and total equity of around 361 million euros in 1H2007. It has more than 2100 employees and 50 branches/outlets in 18 regions of Russia. The bank was established in 1993, mainly as a corporate bank. Over the past few years, it has developed into a universal bank, focusing increasingly on retail banking. The bank is also active in asset management, the capital markets and leasing through two dedicated subsidiaries (Absolut Leasing and Leasing Company Absolut).
KBC is the second largest bancassurance player in Belgium, with a strong and longstanding presence in the prosperous and dynamic Northern region of Belgium, Flanders. KBC is the number 18 bank in Europe and a top financial player in Central and Eastern Europe (on the basis of consolidated assets, branches and employees). KBC’s headquarters are located in Brussels.
The KBC group is present in more than 30 countries worldwide, employs 53 000 staff (nearly 27 000 of whom in Central and Eastern Europe) and caters for 11 million customers (some 6 900 000 in Central and Eastern Europe).
KBC is also implementing in the Central and Eastern European region the bancassurance concept (cross-selling of banking, insurance and asset management/investment products) successfully launched in Belgium. The group has an insurance business in most of the countries in which it also has a banking subsidiary ( Czech Republic, Slovakia, Hungary, Poland, Bulgaria), and is interested in buying an insurer or additional bank in Serbia (where it has acquired A Banka).
KBC intends to replicate in Russia the success it has achieved in other Central and Eastern European countries in the area of asset management.
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