TMCnet News
Russians Look To Hong Kong Banks After Sanctions From West(Alliance News Via Acquire Media NewsEdge) Beijing (Alliance News) - Russian companies and wealthy individuals are turning to Hong Kong for financial services as Western sanctions tighten on Moscow, a report said Monday. Hong Kong banks have seen increasing applications from Russia for both deposits and loans this year, the South China Morning Post reported. From January to end of July, there was a net outflow of 28 billion dollars from Russia, compared with net inflow of 36 billion for 2013, according to CrossBorderCapital, a London firm that monitors global liquidity flows, the report said. Much of that business was headed to Hong Kong, the report said, without providing a quantitative breakdown. Russian mobile operator Megafon plans to convert 40% of its cash to Hong Kong dollars, the report said. Russia's second-largest natural gas company Novatek was considering a similar move, it said, citing Russian media. The Hong Kong dollar is an appealing alternative to the US dollar as the currencies are pegged, Nikos Asimakopoulos, senior associate at Alaco, a risk consultancy in Britain, was quoted as saying. Russians were also turning East for credit, the report said. "Western banks have over the last year been unwilling to loan money to Russian clients," the report cited Hugo Williamson, managing director of IPSA International, a global risk consultancy. "It is estimated that Russian interests have close to 150 billion US dollars in debt repayments this year, and thus Russians have looked to China, Hong Kong and Singapore for sources of finance," Williamson said. Much of that business was going to Hong Kong, the report said, without quantifying the breakdown among Asian countries. But it was more difficult for Russians to open bank accounts or companies in Hong Kong than for other nationalities, said Ashley Galina Dudarenok, managing director of Hong Kong consultancy Alarice International. But she said many were not put off. "They do not mind going through all the trouble because they really want to have a presence here." Some were rebuffed despite their best efforts, Williamson was quoted as saying, because they "failed to pass the banks' anti-money-laundering procedures." Copyright dpa |