Russia’s state-owned Novikombank announced on Thursday that it has established a representative office in Cuba, making it the first Russian bank to establish a presence in the Caribbean nation. This step is considered historic. The initiative is a component of a more comprehensive strategy to improve economic relations between the two former Cold War allies.
The central bank of Cuba issued Novikombank with the requisite license on June 7, according to a bank statement. No instantaneous response has been received from the central bank or Cuban authorities in relation to this development.
Board chairwoman Elena Georgieva underscored the importance of this expansion, asserting, “The establishment of a Novikombank representative office in the Republic of Cuba is not only a significant development for the bank, but also a significant milestone in Russian-Cuban relations.”
In the past few years, the governments of Cuba and Russia have substantially enhanced their collaboration, resulting in the formation of a “strategic partnership.” A variety of sectors, such as energy, transportation, and sugar, are currently the subject of discussions regarding potential investment initiatives.
Amid persistent tensions with the West regarding the Ukraine conflict, the recent mooring of a Russian navy frigate and a nuclear-powered submarine in Havana last week was interpreted as a testament to Moscow’s power.
In recent years, Cuban President Miguel Diaz-Canel has made four excursions to Moscow, which are indicative of the strengthening relationship between the two countries. Novikombank established its new office in Cuba with the objective of enhancing Russian trade and investment activities.
The island nation has experienced a severe crisis, characterized by shortages of essential goods, inflation, and power outages, which has resulted in unprecedented migration levels. However, an increase in Russian tourists visiting Cuba and shipments of oil and wheat from Russia have provided some relief since 2022.
Cuba is still one of the few countries that recognize the Russian MIR credit card, despite the challenging economic environment. In recent years, numerous European and Canadian banks have withdrew from Cuba, primarily as a result of the economic crisis and the apprehension of U.S. sanctions, despite the fact that the country previously welcomed foreign banks in the 1990s following the collapse of the Soviet Union. Nevertheless, it is improbable that this will serve as an excuse for Novikombank, which has already been sanctioned by the United States and other nations in connection with the Ukraine conflict.