“We expect the decision to come in early June and are ready to start operating immediately after receiving the consent,” Alexis Pavlov, head of Forum’s international finance department, told CBW in a phone interview.
Forum is opening a Czech branch in order to establish contacts with local banks and companies and increase the trade exchange between the two countries. The bank also sees the Czech Republic as a potential gate to the other European Union markets.
“We might consider opening a full-service branch, depending on the volume of business we would get,” Pavlov said.
Banks headquartered outside of the EU are obliged to receive consent from the local banking sector supervisor, like the Czech National Bank (ČNB), to allow them to offer commercial services in the EU zone. Commercial representation, like Forum’s, can only offer limited services, such as co-financing of projects and investment activities between the Czech Republic and Ukraine.
According to Pavlov, Forum has already cooperated with Czech banks and companies. “We want to increase the cash-flow between the two countries,” he said, but he declined to give the names of its Czech partners.
Forum currently has no division abroad, but is considering opening representative offices in Slovakia and Kazakhstan this year.
The company operates 110 subdivisions in Ukraine, offering the full scale of financial services to retail and corporate customers.
Forum’s net assets were worth $880,000,000 as of April 1, 2006, when its credit portfolio amounted to nearly $580,000,000 and its own capital amounted to $94,740,000. The bank ended the first quarter of 2006 with a net profit of $1,227,400. Net profit for the year 2005 amounted to $6,400,000.
The bank is controlled by the Ukraine-based insurance house Provita, which holds a 58% stake in the company.
Apart from Forum, other banks from the post-Soviet region are eyeing the Czech market to increase business opportunities and enter EU markets via this country. Conversbank Financial Group, a Moscow-based financial holding that controls 8 banks in Russia, Lithuania and Latvia, plans to open several subsidiaries in the Czech Republic this year to offer retail and corporate banking services.
Another bank with Russian equity, First Czech Russian Bank, has a representation office in Prague, but is trying to get a license to offer full banking services in this country. The company, which finances investment projects and export to Russia, appealed against the decision last month by ČNB not to grant the license.
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