The Bank of Cyprus officially opened its first branch in Moscow this week making it the first Cypriot banking organization to launch operations in Russia.
The move follows successful expansion of the group into Romania and forms part of a three-year plan to take advantage of rapid economic growth rates and low market penetration in the former Soviet Union.
"We are impressed with the opportunity that Russia presents," Bank of Cyprus Chairman Eleftherios Ioannou, told The Moscow News.
"We have been studying the market for 10 years and we feel that this is the right time for us to expand into full banking."
Cyprus has extensive experience with Russian business. The island's secure banking system and favourable system of taxation towards offshore firms attracted floods of Russian companies in the 1990s. Money re-entering Russia from the island also helped to make Cyprus one of the leading foreign investors in Russia.
"Cyprus is the biggest foreign investor in Russia," Ioannou continued. "This represents investments both from Cyprus and from other countries, including the United States, Canada, France, the United Kingdom and, more recently, Sweden. Most of these investors use the services of the Bank of Cyprus, which is the biggest fund on the island."
The opening of a Moscow branch is intended to extend the services provided by the bank to such investors. The bank will also offer financing to small- and medium-sized enterprises, an area that has proven to be successful for the group in countries like the UK and Australia.
The Bank of Cyprus also has longer-term plans to develop personal loans in Russia. "We are very active in housing loans in other countries," says Ioannou. "This is something which is not well developed here in Russia. Consumer credit is another area in which we are very strong."
The group wants to create a network of branches in both Moscow and St. Petersburg over the next three years.
The Bank of Cyprus is among the Europe's 60 largest credit institutions. It serves over 30,000 international customers and last year posted after-tax profits of 317 million euros.
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The Russian branch of the Bank of Cyprus will be headed by country manager Dr. Michalakis Ergatoudes. He has been with the bank since 1983, working in different departments such as Strategic Planning and Research (1983-1995), Corporate Banking (1996-1999) and Credit Risk (2000-2006). Russia is his second appointment abroad, following Australia where he worked as head of the bank's Credit Risk Department.
Dr. Ergatoudes' other jobs include the membership on the special Advisory Committee to the Mayor of Nicosia (1986-1987) for the capital's socio-economic development. During the 1988-1993 span he was also the member of various consultative committees advising the president of Cyprus on matters of socio-economic policy. Since 1995 he has been a member of the Board of the Cyprus Economic Society, the country's main non-governmental economists' institution.
Dr. Ergatoudes studied at the University of Bradford, UK, where he also earned his PhD in economics.
By Rebeccah Billing
