Wright, Simonato: Mikhail Mordasov / RIA Novosti
Foreign banks have become much more careful screening of customers from Russia, many consider them to be unreliable and afraid of the consequences of anti-Russian sanctions. This was told in an interview with The Bell former head of the Russian branch of investment Bank Morgan Stanley Wright Simonyan.
“There is a new client needs to provide a huge amount of information, the audit process is very bureaucratic. As a result, the input thresholds in the big banks has grown considerably. Because otherwise this whole compliance [internal control risk of bringing the company to liability] simply unprofitable”, — said Simonyan.
According to him, the largest foreign banks reduce the share of Russian customers and their money on their balance sheets. “I can confidently say that the client base of banks, which manage the money of large customers is reduced. Decreases and the amount of money under management, and the importance of Russian customers,” said a former banker.
Proved unnecessary Western banks to Russian customers go to their Asian competitors: China, Singapore. But this, according to Simonyan, is a temporary phenomenon, because “Asia is similarly afraid of sanctions”.
In General, according to the former head of the Russian division of Morgan Stanley, European and American investment banks have lost interest in doing business in Russia: “After the 2008 crisis, Russia became a marginal market, business is shrinking. All three channels through which banks have attracted capital — the IPO [IPO], debt and M&A [mergers and acquisitions] — began to dry up. Then came the sanctions, and investbanka it became nothing to do. Privatization with their participation has lost its meaning: because of the sanctions began to be a question: well, we will give the money to the state, and we know how it will be to use them?”
Costs of banks on compliance has increased in recent years, so much so that it “became easier not to deal with Russian assets,” says Simonyan. “Country risk was not just high, and prohibitive,” he sums up.
In early may, Morgan Stanley announced a complete withdrawal from Russia, which will be held in January 2020. The Bank plans to submit to the Bank the application for termination of activities and at the same time to abandon the brokerage and Depositary license. Before the Bank’s management talked about the folding of individual units, in particular, trading in securities and currencies, but were assured that they would remain in Russia consulting business.
Simonyan led the Russian division of Morgan Stanley for 14 years since its opening in 1994.
Video, photo All from Russia.