Support The Moscow Times!

Sberbank, Paribas Plan Credit Venture

Sberbank is creating a joint venture with French lender BNP Paribas to provide point-of-sale credit services at local retail chains.

The venture plans to take 25 percent to 30 percent market share within two to three years. Interest rates are expected to drop as Sberbank enters the segment.

The venture will operate under the Cetelem brand — the name of BNP Paribas' subsidiary that specializes in credit operations at retail chain outlets.

"It's a specific business, and the Sberbank brand doesn't suit it," said Sberbank board member Denis Bugrov. Sberbank will be the major shareholder in the venture, but Bugrov declined to name the exact share or value of the deal.

The agreement is to be inked in two months, and the project is set to launch in early 2012. The venture will be challenging undisputed market leader XKF Bank, which has 28 percent market share.

Sberbank was in negotiations to buy XKF, but the two sides could not come to an agreement on price, according to sources at both banks. In 2004, Cetelem was getting ready to buy Russky Standart, the market leader for point-of-sale credit at that time, but the deal fell through.

Industry sources estimate that Sberbank's share of the new venture is 70 percent to 80 percent.

Market players hope that Sberbank doesn't go overboard in interest rate reductions. "It's a high-risk market, and even Sberbank won't be giving point-of-sale interest rates lower than 20 percent," said XKF Bank marketing director Denis Vlasov.

Read the original Vedomosti article here.

Read more

Independent journalism isn’t dead. You can help keep it alive.

As the only remaining independent, English-language news source reporting from Russia, The Moscow Times plays a critical role in connecting Russia to the world.

Editorial decisions are made entirely by journalists in our newsroom, who adhere to the highest ethical standards. We fearlessly cover issues that are often considered off-limits or taboo in Russia, from domestic violence and LGBT issues to the climate crisis and a secretive nuclear blast that exposed unknowing doctors to radiation.

Please consider making a one-time donation — or better still a recurring donation — to The Moscow Times to help us continue producing vital, high-quality journalism about the world's largest country.