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Alfa Bank: US-sanctioned Russian banking giant expands in China

By Laura He and Olesya Dmitracova, CNN

Hong Kong/London (CNN) — Battered by Western sanctions, Russia’s largest privately owned bank is expanding its business in the world’s second-largest economy.

Alfa Bank, controlled by sanctioned Russian oligarch Mikhail Fridman, has launched a website and support service in Chinese for businesses in the country, it said in a statement earlier this week.

The bank is also planning to open branches in Beijing and Shanghai, it noted in the statement issued Tuesday. That would make the lender the first private Russian bank to open full-service branches in the two major Chinese cities. The move, which was announced in September, could help Russian clients do business with China “even more efficiently,” it said at the time.

CNN has requested further comment from the bank but hasn’t received a response.

“Developing relations with China is one of the most important areas of work for the bank,” the lender had said in a statement in February.

The bank is part of Alfa Group, one of Russia’s largest financial and investment conglomerates, which was founded by Fridman. Following Russia’s invasion of Ukraine in February 2022, the United States and the European Union imposed sanctions on the group and individuals linked to it, as part of their sweeping punitive measures against Moscow.

The sanctions hit Russian banks hard. Alfa Bank made a loss of 117.1 billion rubles ($1.44 billion) in 2022, according to its annual report for that year. A year later, it seemed to bounce back, reporting profit of 120.9 billion rubles ($1.4 billion) for 2023.

China claims to be neutral on the war but has increased ties with Russia on many fronts. Last year, its trade with Russia hit a record $240.1 billion, up 26% from 2022, according to Chinese customs statistics.

The two countries have also reduced their dependence on the US dollar, with about 95% of mutual payments made in Russian rubles or Chinese yuan last year, according to comments by a top Russian official during his visit to Beijing in November.

Last week, at the Group of Seven summit in Italy, the US and its allies accused China of enabling Russia’s war. G7 leaders also threatened further action, including sanctions, to punish Chinese entities that they say are helping Russia circumvent Western embargoes.

In the Tuesday statement, Alfa Bank said it was already working with “thousands” of Chinese companies and had received a solid rating from a major Chinese credit rating agency. The Hong Kong Equity Investment Association had also recognized the bank as the “most technologically advanced” lender, it added.

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CNN’s Mariya Knight contributed reporting.

Article Topic Follows: CNN - Business/Consumer

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