Barclays buys Expobank for £373m

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The Independent Online

Barclays has agreed to buy Russia's Expobank for £373m in its first international acquisition since losing out in the battle for ABN Amro.

The British bank is paying cash for 100 per cent of Expobank to expand in retail and commercial banking in Russia, where its Barclays Capital investment bank already does business. Expobank was founded in 1994 and has 32 branches in western Russia, including Moscow and St Petersburg.

Analysts said the price, at four times Expobank's net asset value, was hefty but that the acquisition was relatively small and gave Barclays a place in an increasingly important market. Russia is in the middle of a consumer boom driven by its 10th straight year of economic growth. The economy expanded by 8.1 per cent last year.

Barclays wants to increase its business in high-growth emerging markets. It lost out to Royal Bank of Scotland last year in the battle for ABN Amro, which would have given it a retail banking business in Russia as well as highly desirable licences in Asia.

Frits Seegers, chief executive of Barclays' global retail and commercial banking business, said: "Expobank is a well-run bank with a good track record of innovative distribution and represents a great opportunity for Barclays.

"Its existing relationships and infrastructure create the ideal platform for us to become one of the leading retail and commercial banks in Russia."

Barclays is buying the stake from Petropavlovsk Finance. The deal is expected to close in the summer and Barclays expects to generate economic profit and a return on equity significantly above the cost of equity by 2011.

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