Russia’s central bank, which has $558.4 billion in foreign exchange reserves, has appointed National Australia Bank to manage up to 1 per cent, or $5.58 billion, of its assets in Australian cash instruments.

The Central Bank of the Russian Federation, which in August held the world’s fourth-largest volume of foreign currency reserves, is expected to soon confirm the arrangement in an official letter to the Australian bank, according to an internal NAB e-mail obtained by Top 1000 Funds.

In February, the bank contacted NAB for assistance as it researched the wholesale clearing and custody market in Australia. “This provided a great opportunity for NAB to develop trusted advisor credentials with CBRF,” the e-mail states.

The e-mail was written by Richard Haynes (pictured), London-based head of international payment solutions for financial institutions at NAB, and also carries the signature of Brian Keogh, Melbourne-based general manager of sales and relationships at the bank.

The central bank then invited NAB to participate in two tenders for wholesale clearing and custody services – which together encompass global investment, asset safekeeping and reporting – for Australian dollar-denominated securities.

The e-mail notes that Sean Pratt, London-based director of international clearing solutions for NAB, and Amy Diab, Melbourne-based director of sales at NAB, represented the bank’s clearing and custody capabilities in the negotiations.

In the e-mail, Haynes indicates that NAB will pursue further business with the central bank.

“The development of this relationship with an important Central Bank [sic] opens up the opportunity for other business units to build on this success.”

Simon Mumme is the editor of Investment Magazine, the market leading monthly publication which focuses on the Australian institutional investment industry. He has been writing about funds management for the past four years, and graduated from the University of Queensland in 2006 with a Master of Journalism.
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