• Russian banks hit by sanctions, ruble rout, slumping oil price
  • HSBC's Morozov follows departures from BCS, VTB Capital

An economist for HSBC Holdings Plc in Moscow became the latest to join a Russian state institution as profits in the financial industry suffer from the country’s first recession since 2009.

Alexander Morozov, who was HSBC’s chief economist for Russia and the Commonwealth of Independent States since 2005, has been appointed head of the central bank’s research and forecasting department, according to a statement on the regulator’s website Wednesday. He follows Alexander Gromov, who left BCS Financial Group in August for the central bank. Vladimir Kolychev joined the Finance Ministry in May from VTB Capital, the investment banking arm of the country’s second-biggest lender.

Banking profits have collapsed this year as sanctions targeting many of Russia’s largest lenders, alongside the crash of oil prices and the ruble, strangle the industry. Investment banking fees paid by Russian companies are at their lowest since 2002, according to New York-based consultancy Freeman & Co.

“I’m very happy the central bank made this acquisition,” Deputy Finance Minister Alexey Moiseev, who was an economist at VTB Capital until 2012, said of Morozov on Wednesday. “I think he’ll be a very good fit.”

Morozov’s departure from HSBC’s Russian unit follows Mark Stadler, whose transfer from head of the bank’s Moscow office to Dubai was announced in August. Morozov was among the top forecasters of the ruble and key economic indicators.

Improving Forecasting

“I believe that there are opportunities to improve macroeconomic
forecasting in the Bank of Russia, which will strengthen the credibility of the monetary policy conducted by the central bank,” Morozov said in a separate statement e-mailed by the regulator.

Global financial firms that once pushed to expand in Russia are pulling out this year. French bank BNP Paribas SA exited its local fund-management venture, Austria’s Raiffeisen Bank International AG sold its pension fund and German reinsurer Munich Re shut its Moscow office.

Deutsche Bank AG will probably close most or all of its investment bank operations in Russia. Renaissance Capital, the investment bank controlled by Russian billionaire Mikhail Prokhorov, is reducing its global workforce by at least 5 percent and cutting salaries as investors pull out of emerging markets.

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