ABN Amro has launched a new custody service for equities in Russia with a view to increasing its competitiveness in this emerging market.

The Dutch bank is already providing custody for Russian bonds from its Moscow office, which is managed by Oleg Mikhalev. This has been confirmed by Calum MacDougall, ABN Amro’s senior vice president, global services, in Amsterdam.

We’ve been in Russia for two years,” says Peter Shepherd, ABN Amro’s custody marketing manager, “offering custody in-house and externally, to both custodians and dealers, for bonds, fixed and short-term instruments, and we expect to move to promissory notes and ADRs later this year.”

Most observers are expecting to see accelerated development of Russian custody and settlement this year and next. High time, according to some, in a market in which some bankers have been known to deliver shares by horse and cart.

With in-house Russian registrars scattered throughout the length and breadth of this vast country, more and more Russian companies are outsourcing to external registrars and looking for more professional custody services, a move that comes as a relief to Western investors and bankers.

Chief among ABN Amro’s competitors for the Russian custody market are Chase, Credit Suisse, Midland Security Services and Merrill Lynch to name a few.

In a country in which transaction costs are high, according to ABN Amro’s European network manager, Rinus Bernaerts, in Breda, Netherlands, banks are undeterred because the profits can also be high.”