Banks in Russia are stepping up their attention to high net worth clients in order to expand within the private banking segment, reports Kommersant, a Russian business broadsheet.

At least seven banks have already opened or are planning to open private banking branches which will service only high net worth individuals across Russia, according to the publication.

One of the reasons behind the moves is the attractive profits to be had from the high net worth space, which are higher than those to be derived from the retail segment, the report said.

Russian Standard Bank reportedly opened two private banking branches in Moscow and Novosibirsk in September, and is also planning to launch wealth management operations in Saint Petersburg and other key Russian cities in the near future.

MFK-Bank, part of Russian investment company ONEXIM Group, has also opened two wealth management branches - in Moscow and Zhokovka. “By the end of 2010 we are planning to open five more ‘elite’ branches in different regions,” Aleksandr Popov, the bank’s chief executive, is reported to have said.<

In June, HSBC announced the opening of its first Russian branch for high net worth clients. Four more banks have announced similar plans, according to the report.

VTB 24 bank, which has private banking offices in Moscow and Saint Petersburg, will open further branches in Krasnodar in October and later in Yekaterinburg, bringing the number of such branches to five.

Alfa Bank, which uses A-Club as its private banking brand, is planning to open one more branch by the end of this year, which will increase its total of wealth management branches to eight. Additionally, Sberbank, which has historically focused on retail customers, will open its first “pilot” high net worth offering in Moscow in October.

The selection criteria for high net worth clients differs from bank to bank, Kommersant said, with Uralsib Bank 121 being the most demanding bank with regards clients’ assets. The bank, which has 10 wealth management branches in different Russian regions, asks that clients initially deposit $1 million. MKF-bank’s minimum deposit, meanwhile, is $50,000.

Citibank, which has two wealth management branches in Moscow, established the lowest deposit requirement for its clients, that of RUB1.3 million ($43,000), the newspaper said.

“By taking into consideration that about 70 per cent of profits in retail are provided by this segment, that kind of banks’ behaviour is logical,” Andrei Koryakin, Citibank’s head of sales and development, is reported to have said.

“The competition in ordinary retail is already very high, while at the same time the niche with clients whose wealth varies from $100,000 to $1 million is barely explored,” a spokesperson for Uralsib Bank 121, is reported to have said.