Русский
Alfa Bank, Russia’s largest private lender, has applied to the Chinese authorities to open offices in Beijing and Shanghai. The bank is aiming to become the first private Russian bank to open fully-fledged branches in China, and comes after it recently expanded its client support services for Chinese businesses. Alfa Bank said it is already providing services to thousands of companies working with Russia and has launched a Chinese-language website and support for Chinese-speaking clients.
Alfa Bank’s board of directors first revealed plans to open offices in Beijing and Shanghai last September, saying it views expansion in the Asian powerhouse as “strategically important.” In April, the bank announced it will launch the new branches by the end of 2025, saying the move would facilitate RMB Yuan transactions for both Chinese and Russian businesses.
In 2023, Alfa Bank emerged as the top lender in Chinese RMB Yuan in Russia, accounting for a third of all RMB Yuan loans in the Russian market.
The move also reflects growing economic ties between Russia and China after the two countries declared a ‘no limits’ friendship. The process has accelerated in the face of soaring tensions between Moscow and the West over the Ukraine conflict and multiple waves of economic sanctions against Russia.
Earlier this year, Alfa Bank became the first major Russian bank to receive an international rating in China after Lianhe Credit Rating assigned it with an AA- rating with a stable outlook.
The agency attributed its decision to a number of factors such as Alfa Bank’s systemic importance, efficient corporate management, high asset quality, and strong lending capacity. The bank had assets of US$62 billion as at 2020.
Alfa Bank was founded in 1990 by Russian businessman Mikhail Fridman, who remains the controlling owner. Headquartered in Moscow, it operates in seven countries, providing financial services to 22 million active corporate customers and over 1 million active retail clients as of 2021. The bank is under EU and US sanctions and has been barred from the SWIFT global payments network, meaning that the payment mechanism for exchanging RMB Yuan will probably be Russian rather than Chinese. Beijing has been wary of banking involvement with Russia in terms of attracting secondary sanctions, however as Alfa Bank is a Russian entity and already sanctioned, the risk becomes something of a moot point as transactions will presumably be made via Russia’s SPFS network, which is already sanctioned but does not utilise SWIFT.
The move illustrates that cross-border banking can still take place both without SWIFT and regardless of sanctions. Providing the entity involved is Russian, there is little else the West can do to stop non-SWIFT network transactions between two parties. This type of arrangement may become more common in Russia’s banking relations with other friendly countries.
