MOSCOW, Oct 28 (Reuters) - Russia's mid-sized Sovcombank isbuying the local unit of GE Money Bank, a subsidiary of U.S.conglomerate General Electric, in another departure of aforeign bank from a Russian domestic market dominated bystate-controlled lenders.
Sovcombank, ranked among Russia's top 60 by assets, said onMonday it had signed a binding agreement to buy GE Money Bank,expecting to close the deal after getting the green light fromlocal regulators. It did not disclose the price.
The Russian unit of GE Money Bank is ranked among Russia's150 biggest banks by assets and is focused on high-marginconsumer lending. It declined to comment.
General Electric will float a majority stake in its Swissconsumer finance unit GE Money Bank in the fourth quarter, aspart of a retreat from the sector to focus more on industrialinterests.
Many foreign banks entered Russia just before the globalfinancial crisis of 2008-2009. They are now scaling backoperations to allocate funds to meet higher capital requirementsat home, at a time when Russian state-controlled giants likeSberbank and VTB are ramping up theirbusiness.
Although consumer lending margins remain high, the Russiancentral bank is trying to cool consumer lending expansion, whichsaw growth of about 50-70 percent in recent years, by demandingmore capital and provisions for possible bad loans.
Among others, Britain's Barclays and HSBC and Spain's Santander have scaled back their operationsin Russia. However, other foreign banks such as Italy'sUniCredit and Austria's Raiffeisen Bank seeRussia as a key source of growth.
HSBC Holdings (HSBA)
