Exclusive | Chinese banks eye Russian deals as US sanctions sour relations
Russia and China have been deepening economic ties in recent years, with trade between the two nations growing to US$89.2b last year
Chinese banks could be beneficiaries of deteriorating relations between Russia and the West, with pressure growing on European and US investment banks to stop dealing with Moscow.
Bankers say sanctions imposed on Russia in response to the Ukraine crisis are creating a situation similar to that in Iran, where Western banks and companies are effectively barred from doing business by regulators at home.
"We don't have any problem with Russia," said a senior executive with a mainland bank in Hong Kong, who declined to be named. "If American banks can't take any Russia-related clients, then I will definitely welcome them to do business with us."
We basically cannot touch anything that has relations with Russia
Financial industry sources told the South China Morning Post that several banks including Goldman Sachs, JP Morgan and Barclays, have tightened their internal compliance measures on deals that may have direct or indirect relations to the Russian government or Russian companies.
US sanctions on Iran are so rigorous that banks routinely ask potential clients if they have any business activities in the country. If the answer is yes, the US bank may have to walk away from the deal even though the client is not an Iranian company.
Last year's planned Hong Kong listing by Chongqing Lifan Group, a major motorcycle manufacturer in China, suffered because of these rules.
Market sources say it was pitched by many US investment banks, but all dropped out once it was discovered that Lifan exported products to Iran.