By Marcus Williams

Russian investment bank Renaissance Capital today announced it was opening a representative office in Belarus in anticipation of a state-sponsored sell-off of assets by the former Soviet state.

The office will be led by Sergey Levin, who joins the firm as chairman of Renaissance Capital in Belarus, and will be based in Minsk. The office will staffed locally and supported by Renaissance Capital’s investment banking hub in Kiev.

Levin is a Belarusian national with experience in the Belarusian private and public economy. Levin’s immediate prior position was managing director of Lebortovo Capital Partners, a Belarus-based private equity house.

The Belarusian State Property Committee published a list on November 25 of seven government owned companies that it planned to sell to help meet commitments to the World Bank and IMF.

The list includes confectionery maker OAO Krasny Mozyryanin, manufacturers OAO Belfa and OAO Kupalinka, chemicals company Barkhim, OAO Rechitsa Textile and two engineering plants.

BG Capital, the investment unit of Bank of Georgia, opened an office in Minsk last year. VTB and Unicredit had operations in the country too but Rencap is believed to be the first heavyweight investment bank to set up on the ground.

Mark Pursey, director in Belarus of Grayling, the international financial communications and investor relations company which opened an office in Belarus earlier this year, said the entry of Rencap into the market was a sign of how seriously international investors are taking the forthcoming government privatization programme.

He said: “Renaissance’s track record, geographically in terms of the CIS and also in terms of regional M&A – trade sale disposals is where we view practically all the early privatizations – should provide them with some leverage through 2010 and the early-stage asset sales.”

By Ivan Anderzhanov in Moscow

The analyst community fretted as they poured over the news yesterday that Raiffeisen non-performing loans in Russia have jumped from to 7.2% by the end of June from 2% at the end of 2009.

The interim report shows that the Austrian bank earned almost nothing in Russia during the second half of the year, posting a €23m in post-tax profit for the six months with just €9m for the last second quarter.  The main reason for the weak results was the ongoing growth of bad loans and increased provision charges for loans, which increased by 37%  from €110m in the first quarter  to €151m.

Leonid Slipchenko, an analyst at UralSib, said and provision charge are likely to put substantial pressure on Russian banks’ bottom lines.

Slipchenko is forecasting that NPLs may double to 7% of gross loans for Sberbank and more than 8% for VTB. He said: “Russian banks will post either no net income or losses in 2009, and clearly show that their 30-40% discount to EM peers – especially those in Eastern Europe – is justified. In addition, we consider Raiffeisen to be a high-quality credit institution, and such weak results indicate that we may see even worse second quarter results from Russian banks.”

Still the figures are far better than the forecasted NPL range of 15-30% being bandied about ratings agencies and bearish banking commentators.

Maxim Rakosnov, a fixed income analyst at Renaissance Capital, was more bullish and said the figures published by Raiffeisen confirm Rencap’s positive view on the credit fundamentals of the Russian banking system. He said: “The revealed indication of bad loans increase in the Ukrainian segment signals the necessity of significant recapitalisation of the Ukrainian banking system in order to cope with asset quality problems, in our view, and this problem has yet to be solved.

In Ukraine and Belarus, which have been severely hit by the crisis, the loan default rate at Raiffeisen shot up to 15.5 %.

By Jason Corcoran in Moscow

German bank Commerzbank has rubbished reports it has offered to sell its Russian subsidiary to Belarusbank, the largest bank in Belarus.

Media reports in Belarus and Russia on Wednesday quoted Nadezhda Ermakova, chairperson of the board of Belarusbank. “Commerzbank has made us an offer to purchase its subsidiary” Ermakova said in comments to reporters in Minsk.

Commerzbank declined to comment but a source at the German bank in Frankfurt said the story was nonsense. “We have no intention of selling the bank in Russia which is an integral part of our plans,” said the source.

Belarusbank is looking to purchase a bank in Russia to service the flows of Belarusian trading houses in Russia and domestic companies working on that market.

Commerzbank has been combining its operation in Russia with Germany’s Dresdner Kleinwort, which it acquired last year.

Dresdner, which has been a pioneer in Russian investment banking, has seen its pre-eminent position eroded over the past few years. The business has been scaled back and a slew of senior key bankers have left its Moscow office.

Commerzbank took at 15.3% stake in Russia’s Promsyazbank in August 2006 and said it could increase its stake at a later date.