With assets of some $10.5bn at last year-end, Gazprombank is the third-largest bank in Russia. It is owned by monopoly gas producer Gazprom, Russia’s largest company and itself owned by the state. Yet, as its advisers have been at pains to point out to investors, it is no pocket bank – though that’s exactly what it was when first established in 1990.
More recently, however, the bank has purposefully diversified into a more universal institution, with 35,000 corporate clients and one million retail customers. One measure of its changing status is the fact that outstanding loans to Gazprom Group have fallen rapidly from 70% of the total in 2002 to 35% last year. That is not because it is lending less to the gas producer, but because it is expanding the rest of its loan book – assets grew by some 60% in 2004. The investment grade rating of its international paper allows cheaper funding, giving it a valuable competitive advantage over its smaller rivals, of which there are many.
