Vladimir Putin's Favorite Bankers

Following the collapse of Lehman Brothers in 2008, foreign banks froze credit lines in Russia, leaving some big companies scrambling for financing. Now the Kremlin is trying to make sure that history never repeats itself. “There was surprise and shock when Western banks decided to go from lending money to anyone to refusing to roll over loans from one month to the next,” says Liam Halligan, chief economist at Prosperity Capital Management, an investment fund in Moscow. Government officials “decided they needed to find long-term financing solutions.”

Russian authorities are building up the investment banking arms of state-run Sberbank and VTB Group, ranked the country’s biggest and second-biggest lenders. They have blessed or orchestrated a string of mergers and acquisitions, including Sberbank’s $1 billion takeover of brokerage Troika Dialog, to be completed in February. VTB last year bought Bank of Moscow and TransCreditBank. The deals give state-owned banks more than 60 percent of the domestic market for underwriting corporate bonds, up from 34 percent in 2010, according to data compiled by Bloomberg.