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Alfa Bank: US-sanctioned Russian banking giant expands in China

Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world. Hong Kong CNN  —  Battered by Western sanctions, Russia’s largest privately-owned bank is expanding its business in the world’s second-largest economy. Alfa Bank, controlled by sanctioned Russian oligarch Mikhail Fridman, has launched a website and support service in Chinese for businesses in the country, according to a statement issued earlier this week. The bank would also open branches in Beijing and Shanghai, it added in the statement. That would make the lender the first private Russian bank to open full-service branches in the two major Chinese cities. The move, which was first announced in September, could help Russian clients do business with China “even more efficiently,” it said at the time. CNN has called and emailed the bank for further comment, but hasn’t received any response. “Developing relations with China is one of the most important areas of work for the bank,” the lender had said in a statement in February. The bank is part of Alfa Group, one of Russia’s largest financial and investment conglomerates, which was founded by Fridman. Following Russia’s invasion of Ukraine in February 2022, the United States and the European Union imposed sanctions on the group and individuals linked to it, as part of their sweeping punitive measures against Moscow over its war effort. The sanctions hit Russian banks hard. Alfa Bank made a record loss of 117.1 billion rubles ($1.44 billion) in 2022, according to Reuters. A year later, it seemed to bounce back, reporting net profit of 118 billion rubles ($1.4 billion) in 2023, according to its financial statements. China claims to be neutral on the war, but has strongly backed Russia and grown their ties on many fronts. In 2023, China’s trade with Russia hit a record level of $240.1 billion, up 26% from 2022, according to Chinese customs statistics. The two countries have also reduced their dependence on the US dollar, with about 95% of mutual payments made in Russian rubles or Chinese yuan last year, according to a top Russian official during his visit to Beijing in November. Last week, the US and its allies accused China of enabling Russia’s war at the annual Group of Seven (G7) summit in Italy. G7 leaders also threatened further action, including sanctions, to punish Chinese entities that they say are helping Russia circumvent Western embargoes. In the Tuesday statement, Alfa Bank said it was already cooperating with “thousands of” Chinese companies and had received a AA- rating with a stable outlook from a major Chinese rating agency. The Hong Kong Equity Investment Association (HKEIA) had also recognized the bank as the “most technologically advanced” lender, it added. CNN’s Mariya Knight contributed reporting.