Russia's Booming Bank Industry Looks for Respect in America
BOSTON — When Rossiyskiy Kredit Bank was founded in 1990, many of its eventual top officers were teenage students. Bank president Vitaliy Malkin hired them fresh from Russian universities a few years later because they were intelligent, knew foreign languages, and would learn new ways quickly.
"They have grown in parallel with the business," says Mr. Malkin.
Board chairman Dmitry Lyubinin is 26 - he's portrayed in a bank brochure playing soccer. The chief financial officer is 25.
The bank's business has grown explosively. Rossiyskiy Kredit got a general banking license in 1992 and now has $2.5 billion in assets. It is among the biggest of Russia's 2,000 banks.
Some 15 to 17 of these banks meet modern banking standards, says Malkin during a visit to Boston. "Everything is new in Russia," he says.
Malkin is visiting the United States to find a "strategic partnership" with an unnamed American investment-banking firm.
Rossiyskiy Kredit is seeking permission to open a representative's office in Boston and a branch in New York. But so far the Federal Reserve has not given the OK, perhaps because Russian banking in general has been regarded as something of a Wild West scene.
Malkin says that has changed. Corruption "is not a question anymore" for the established financial institutions, he says. The legal system has improved, he adds.
Malkin says the Russian economy has turned around at last after the collapse of its huge military-
Mikhail Gorbachev, another recent visitor to Boston, disagrees. The former Soviet leader says the rate of decline in the Russian economy has slowed. "But if you don't manipulate the statistics, there is no growth," he says.
Mr. Gorbachev recalls how statisticians told Yuri Andropov, the Soviet leader in 1982, that the economy had probably shrunk. He told them to change that. "They did some work, and we were able to detect some growth."