Internationalisation Strategies of Russian Financial Multinationals: From Global Expansion to Global Market Exodus?

In this chapter, we applied the modified framework of the evolution as a financial MNE suggested by Ramamurti to the case of the largest Russian state-owned bank, Sberbank, which has actively pursued internationalisation since 2011. The results of our analysis demonstrate that Sberbank has benefited significantly from globalisation and Russia’s integration into the world economy to evolve from an inefficient state-owned bank established at the launch of Russia’s market transition to Russia’s leading state-owned multinational bank. We conclude that despite the fact that Sberbank possessed medium-to-high levels of bank-specific advantages in Eastern and Central Europe, it remained predominantly a regional financial multinational, as measured by the depth and breadth of its internationalisation, even at its peak. Thus, despite some limitations in the assessment methodology, Sberbank is a representative case of an adolescent financial multinational. Russia’s new reality of global isolation from Western financial markets is pushing its banks to find new markets in friendly jurisdictions such as China, India, and the United Arab Emirates. However, foreign entry into these markets is hindered by high entry costs, administrative and regulatory restrictions, and the increased risk of secondary sanctions on counterparties. Consequently, the future internationalisation strategies of Russian banks remain uncertain.