CITIGROUP INC. 
MOSCOW (Reuters) - U.S. bank Citi (>> Citigroup Inc) is seeing business pick up in Russia as the country's economic crisis abates and is staying as engaged as it can given Western sanctions, its Russia head said.
Marc Luet, who is also Citi's head for Ukraine and Kazakhstan, said his bank has become busier with Russian mergers and acquisitions (M&A) and that there is growing interest in corporate debt issuance.
"We're seeing a pick-up in debt capital markets (DCM). Part of it is liability management, part of it is new issuance," Luet said in an interview at the Reuters Russia Investment Summit.
Russian debt issuance slowed to a trickle after the United States and European Union imposed sanctions on Russia in 2014 over the Ukraine conflict.
The sanctions limited access to international capital for large Russian banks and certain other businesses, scaring away investors and spooking compliance departments at top banks.
"I don't think we're going to quite return to the 2013 level, but we're going to see more issuance than this year. And this year was better than last year," Luet said, adding Citi had arranged Russian DCM deals worth more than $15 billion in 2013.
Better pricing conditions, an economic stabilisation and the maturity profile of outstanding debt are all encouraging greater issuance, Luet said.
A restraining factor is that many Russian companies have cut capital expenditure since the economy entered a deep slump when global oil prices tanked in 2014. A halting economic recovery this year has yet to spur any great increase in investment plans.
Luet said that investors had become accustomed to the sanctions and that banks had established which deals they could handle and which they should leave alone.
"We're going to stay as engaged as we can and take advantage of any opportunities that arise," he said.
Like many other global banks, Citi did not help the Russian state with this year's privatization program, including a stake sale in diamond miner Alrosa (>> AK Alrosa PAO). Alrosa is not under Western sanctions but the deal was handled by a Russian investment bank.
"We didn't stay away from the Russian government's privatization program per se," Luet said. "Every case is different, every transaction is different. It's not a blanket approach. We look at what's coming up."
Citi's Russian operation earned about 14.55 billion roubles ($225 million) in profit last year, roughly double what it made in 2014 and better than many domestic Russian banks.
Luet said that Citi had stuck to its tactic of serving multinationals and large Russian blue-chip companies as well as affluent retail clients.
"We haven't changed our strategy because of the crisis," he said.
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(Additional reporting by Kira Zavyalova, Christian Lowe and Dmitry Antonov; Editing by David Goodman)
By Alexander Winning and Katya Golubkova
