Austria's biggest bank is entering retail banking in Moscow, becoming one of the few foreign bank to offer consumer financial services in Russia.
Bank Austria announced Tuesday that this quarter it will add three branches in Moscow to the one it already has.
The collapse of Russia's financial sector had created opportunities for foreign banks by "increasing demand for safe havens and elementary banking services," Alarich Fenyves, a member of the bank's board of management, said in a prepared statement.
The sector collapsed after the Russian government defaulted on its debts last August.
The decision to enter retail banking comes despite losses of about $185 million at Bank Austria last year on capital-market-related activities in Russia.
As a result, Bank Austria was forced to pump $50 million of fresh capital into its Russian unit, BankAustria Creditanstalt Russia LLC.
The bank has since reduced securities-related activities in Russia and refocused on commercial and retail banking and on clearing operations between Russian and foreign financial institutions.
Bank Austria obtained a license to engage in consumer banking in Russia in 1997.
The bank said in a release that it sees opportunities for handling business in Russia with international companies, joint ventures, and export-oriented Russian companies.
Michael Franz, the chairman of the board of the bank's Moscow subsidiary, estimated the potential Russian market at about 2,000 companies and 100,000 retail banking customers.
Bank Austria's move comes as part of a broader push by the Austrian bank across Eastern Europe in countries including Poland, Hungary, and the Czech Republic.
In a related move to expand in Eastern Europe, the Vienna bank last May took over the custody activities of Budapest Bank Rt as part of a buildup of its Hungarian operations.