Russia’s central bank, which has $533.4 billion in foreign exchange reserves, has appointed National Australia Bank to manage up to 1 per cent, or $5.33 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 I&T News.

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, 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 NAB.

The central banks 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.”