Barclays targets Russian bank

Barclays targets Russian bank

By Peter Thal Larsen in London and Catherine Belton in Moscow

Published: February 13 2008 20:33 | Last updated: February 14 2008 11:25

Barclays is in advanced talks to buy Russia’s Expobank as it seeks to establish a foothold in the Russian market.

The British bank is negotiating to buy a controlling stake in Expobank, a small retail and commercial banking group whose shareholders include Peter Hambro, the mining entrepreneur, people familiar with the matter said.

The deal under discussion is thought to value Expo-bank at about three times its book value, implying a price in excess of $400m. However, final agreement has yet to be reached and the deal could still fall through.

If completed, the takeover would mark the first significant international step by Barclays since it abandoned its takeover bid for ABN Amro, the Dutch lender, last autumn. John Varley, chief executive, has stressed that Barclays will continue to expand its international operations – a strategy it was pursuing before the ABN Amro talks started in earnest a year ago.

Barclays is already offering investment banking services in Russia through its Barclays Capital subsidiary. But Frits Seegers, the executive in charge of Barclays’ retail and commercial banking operations, has also identified the country as a target for expansion.

Several large banks including HSBC are seeking to expand their operations in Russia by selectively opening branches. However, Barclays is thought to see Expobank, which was founded in 1994, as a quicker way of establishing a presence and obtaining a Russian banking licence.

Barclays declined to comment.