What Catherine the Great can teach us about banking in Russia

When the St Petersburg International Economic Forum opens on 16 June it will feature a space promoting Italian business and industry, curated by AO Banca Intesa. Robert Galbraith talks to Antonio Fallico about his role as chairman of the first Italian-owned bank in Russia.

Robert Galbraith


Intesa Sanpaolo has enjoyed a long and fruitful relationship with Russia despite the periodic geo-political upheaval that has punctuated the bank’s evolution within the country.


Banca Commerciale Italiana was the first foreign bank to open representative offices there in 1974. The subsidiary has continued to expand and is now a major partner for Italian and Russian companies, especially in strategic sectors such as energy.


Antonio Fallico, who has been chairman of Banca Intesa in Russia since 2003, has played a central role in its growth and become an influential figure in Russian-Italian relations.


He points to the foundations put down by Banca Commerciale Italiana, which was known as BCI abroad but often referred to as Comit in Italy, as the main reason for its success.

“It was the first Italian bank to build a foreign operation of any size. We have inherited the tradition and excellence from Comit which, combined with hard work and good decision-making, has allowed us to take opportunities that other Italian banks and foreign banks, such as Deutsche Bank, did not take”, Fallico explains.
Photo: Mr. Antonio Fallico, Chairman of Banca Intesa Russia.

Comit’s expertise in providing finance to big industrial projects included the construction of Russia’s largest car plant at Togliatti and the building of a gas pipeline from Russia to Europe. The size of its loan portfolio meant that it ranked in the top five foreign banks during the Eighties.


Banca Intesa continued to be a key partner for these projects and was providing some of the financing for Nord Stream, a pipeline from the Baltic Sea to Germany.


It was also one of the banks involved in Blue Stream pipeline, which takes gas from Russia to Turkey. Intesa Sanpaolo provides services for more than half of foreign trade operations between Russia and Italy.

The importance of the bank in Russia is reflected in its involvement in the St Petersburg International Economic Forum (SPIEF), which will be held from 16-18 June.


Italy is state partner at the event and Banca Intesa has contributed to build a space that will be used to promote Italian business and industry. All Italian major companies with a presence on the Russian market will be taking part.


Prime minister Matteo Renzi will be the only foreign premier from a G8 country to attend the event.


Fallico’s interest in Russia started with studying its language and history at university. He completed a thesis on the economic reforms introduced by Catherine the Great in the 18th century. An academic career followed and the Sicilian-born professor spent almost 20 years teaching economics at Verona University.


In 1995, he decided on a change of direction and accepted a role as head of the Russian office of Banco Ambrosiano Veneto, which later merged into the Intesa Sanpaolo group.


Banca Intesa was launched in 2003, when it became the first Italian-owned bank to be registered in Russia. Fallico was appointed its chairman.

“We are historically the bank of choice for the big Italian groups and medium-sized businesses operating in Russia. But we have done more deals that weren’t Italian. It is a question of visibility and reputation”, he says.

His wealth of experience and knowledge means Fallico has a role in Italian/Russian relations that extends beyond his bank’s areas of business.


He has been a valuable source of advice on trade and business relations between the two countries and on the Russian economy. As a result, he has received several awards including the Order of Friendship from President Putin in 2008 and Italy’s Star of Merit for Labour from President Ciampi in 2006. In 2008 he was made honorary consul of the Russian Federation in Verona.


Fallico takes a personal interest in the bank’s cultural activities as well. He followed the process which saw Intesa Sanpaolo being allowed to buy a collection of Russian icons.


He says it came about by chance. An important Venetian collector, a client of Ambrosiano Veneto, was forced to sell them when in severe financial difficulties.


The heart of the collection was bought by the bank but the Russian culture minister and the Moscow Patriarchate of the Russian Orthodox Church had to rule on the validity of the transaction. He decided that a private buyer could acquire the icons because they are not considered to be works of art.


More than 500 of them are held at the bank’s headquarters in Vicenza and displayed in a museum in the city.


Russian GDP fell by 3.7 per cent in 2015 and prospects for the economy depend mostly on two factors: the oil price and sanctions imposed during the Ukrainian crisis, which have since been extended.

The Russian economy is tied to the price of oil. Fallico thinks that if it stays around the current level of $50 per barrel then 0.5 per cent growth is possible this year and 0.5-0.7 per cent in 2017. If it falls, however, the economy will remain in recession.

On sanctions, Fallico expects them to remain in place in the short term. But he has noticed signs of change and stresses the need to look towards the post-sanctions phase.

“Sanctions are a very difficult issue because of geo-political considerations. However, I see that some countries in Europe are beginning to doubt their effectiveness, so it makes sense to start preparing for change”.


These issues are of special importance to Italy, which is Russia’s fourth-largest trade partner after China, the Netherlands and Germany, according to a report by Intesa Sanpaolo. The struggling Russian economy has meant that trade between the two countries, which peaked at about €31 billion in 2013, declined by more than 13 per cent the following year and fell further in 2015.

Related stories.