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Barclays shrugged off the political uncertainties swirling through Russia as it unveiled a $745 million (£373 million) deal to buy Expobank, a retail and commercial bank concentrated in Moscow and St Petersburg in the country's western region.
Although Barclays Capital, the investment banking arm of the UK's third-largest bank, has a representative office in Russia, the acquisition marks Barclays entry into retail banking in the country.
The deal came just hours after Dmitry Medvedev surged to a landslide victory in Russia's presidential elections, claiming more than 70 per cent of the vote over the weekend.
Mr Medvedev had been hailed by the Kremlin as the natural successor to Vladimir Putin, who must leave office having served two terms.
However, critics accused Russia's government of stage-managing the election, raising concern about Mr Putin's power to dictate political and economic events behind the scenes. Mr Putin is expected to be named as Mr Medvedev's prime minister.
The deal comes as tensions rise between Russia and the US, in particular over Mr Putin's attitude to Iraq. Russia's relations with Europe have also been strained during the past year as a result of its growing power as an energy provider to the continent.
Gazprom, the Russian energy giant, has been regularly tipped as a buyer of Centrica, owned by British Gas.
"The reality on the ground is that UK businesses are operating as usual. We've only had a positive reaction to our interest in the country," a Barclays spokesman said this morning.
Barclays said that the acquisition was in line with the strategy of increasing exposure to emerging markets with strong growth prospects.
The bank expects to complete the deal during the summer. Expobank, which has 32 branches and net assets of $186 million, is owned by Petropavlosk Finance.
Barclays, which plans to invest in Expobank and rebrand it, expects to generate profits from the acquisition by 2011.
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Barclays Wisdom (Continued).
The West owes a debt to President Putin and his protege Dmitry Medvedev and vice versa. Russia is the West's salvation, and we no less Russia's salvation, from dominance of the world economy by China and India. "United we stand, divided we fall" at full force here. And, a "united we stand, divided we fall" policy that extends beyond financial markets to included a unified policy on Iraq, Iran, North Korea, Kosovo, Palestine and the counterterrorism of extremists elements the West's messianic crusade to coerce the world into an embrace of democratic principals has wrought.
The sour grapes must end regardless of the humiliation to the West of its defeat. The defeat includes the excessive baggage of Mikhail Khodorkovsky that the US must bear and Boris Berezovsky for the UK, a justly imprisoned scourge and a discarded scourge on Russian society, another hallmark victory of President Putin over the West. They are our now scourges to bear. Ode to Barclays!
Karon von Gerhke, Alexandria, VA USA
Barclays' is wise. Russia, China and India are in line to replace the United States and the United Kingdom as the leader of the WESTERN world.
The pervasive mainstream media hype against Russian leadership is just that-HYPE. HYPE stemming from sour grapes of a disastrously foiled foreign policy of the 1990s when the US and UK installed an oligarchical class of bandits who had been primed to sell out to the West.
President Putin derailed the attempted coup to usurp the wealth of his Motherland, not by revisiting the rigged privatization schemes of his inebriated predecessor but rather by allowing those privatizations to flourish. The result has produced monopolies the likes of which the world has known with majority stock interest under the control the Russian government.
Abject fear set in as the West realized they had been craftily bested by the free market system they imposed on Russia. A stabilization fund of $500 billion and mounting says it all.
Barclays wise indeed!
Karon von Gerhke, Alexandria, VA USA