In April 2022, Alfa Bank, Russia’s largest private bank, faced comprehensive sanctions from the US government. In response, the bank has expanded its services to Chinese enterprises and is currently planning to open branches in Beijing and Shanghai.
According to a report by Bloomberg on Tuesday (June 18), Alfa Bank, controlled by Russian billionaire Mikhail Fridman and his partners, announced its intention to apply to the Chinese authorities to establish branches in Beijing and Shanghai. The statement also mentioned that the bank has been serving “thousands” of Chinese companies doing business with Russia and has set up a Chinese language website, with managers who can speak Chinese providing assistance.
Since Russia’s invasion of Ukraine in February 2022, the US, the EU, and allied nations have imposed sanctions on Russia’s major financial institutions. Shortly after the outbreak of the war, the US imposed crippling sanctions on Alfa Bank, while the EU also added it to the sanctions list in 2023.
In contrast, China has declared “unlimited” cooperation with Russia to help it cope with international sanctions. However, by the end of 2023, despite this announcement, China’s state-owned banks tightened financing restrictions on Russian customers following the US’s secondary sanctions on financial institutions assisting Moscow’s invasion of Ukraine.
Nevertheless, this has not deterred Alfa Bank from venturing into the Chinese market. Earlier this year, the bank received its first credit rating in China from China Lianhe Credit Rating Co., Ltd., with a rating of AA- and a stable outlook.
The new Chinese website of Alfa Bank currently offers services such as payroll services, corporate account services, loans, and the use of digital financial assets.
In an effort to further isolate Russia from the global financial system, last Wednesday (June 12), the Biden administration announced a series of new financial sanctions aimed at disrupting the fast-growing technological ties between China and Russia, preventing Russia from acquiring military weapons.
Last month, the US State Department stated that China should not play both sides between Russia and the West and reiterated that Chinese support for the Russian military-industrial complex and indirect assistance to Putin in invading Ukraine are unacceptable.