Citi sees Russia business pick up as crisis abates

Tue Sep 13, 2016 10:10am EDT
 
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By Alexander Winning and Katya Golubkova

MOSCOW (Reuters) - U.S. bank Citi (C.N: Quote) is seeing business pick up in Russia as the country's economic crisis abates and is staying as engaged as it can given Western sanctions, its Russia head said.

Marc Luet, who is also Citi's head for Ukraine and Kazakhstan, said his bank has become busier with Russian mergers and acquisitions (M&A) and that there is growing interest in corporate debt issuance.

"We're seeing a pick-up in debt capital markets (DCM). Part of it is liability management, part of it is new issuance," Luet said in an interview at the Reuters Russia Investment Summit.

Russian debt issuance slowed to a trickle after the United States and European Union imposed sanctions on Russia in 2014 over the Ukraine conflict.

The sanctions limited access to international capital for large Russian banks and certain other businesses, scaring away investors and spooking compliance departments at top banks.

"I don't think we're going to quite return to the 2013 level, but we're going to see more issuance than this year. And this year was better than last year," Luet said, adding Citi had arranged Russian DCM deals worth more than $15 billion in 2013.

Better pricing conditions, an economic stabilisation and the maturity profile of outstanding debt are all encouraging greater issuance, Luet said.

A restraining factor is that many Russian companies have cut capital expenditure since the economy entered a deep slump when global oil prices tanked in 2014. A halting economic recovery this year has yet to spur any great increase in investment plans.   Continued...

 
Marc Luet, Citi's head of Russia and Central and Eastern Europe, attends an interview at the Reuters Russia Investment summit in Moscow, Russia, September 12,2016. REUTERS/Grigory Dukor