* Investment arm of VTB eyes U.S. bargains
* Looking for organic growth, acquisitions to expand in U.S.
* Sets up in Dubai to boost Russian-Gulf Arab business
* Has Islamic bond mandates each worth $100 mln-$300 mln
By Nicolas Parasie
DUBAI, June 21 (Reuters) - VTB Capital, the investment arm of Russian state bank VTB, plans to set up in the United States where it is looking to take advantage of cheap valuations in the financial services sector, its chief executive said.
Speaking to Reuters on Sunday, Yuri Soloviev said it had also set up in Dubai to tap opportunities in the Gulf, the world's largest oil exporting region.
Soloviev told Reuters that VTB was looking at organic growth, but that he also saw good opportunities for acquisitions in the U.S. "The number of targets is very significant, they are trading at all-time lows," declining to be more specific.
With some of world's biggest investment banks caught in the global financial crisis forcing them to deleverage and reduce some of their international operations, VTB Capital is aiming to fill the void by expanding both at home and overseas.
It already has offices in London and Singapore.
"We are looking at the Americas actively, the U.S. is a very deep capital market, there is a well-established investor base into Russian products," Soloviev said, adding it hoped to open a representative office.
Established a year ago, the investment unit could already contribute as much as 15 percent of the parent company's net profit when results are released in July, he said.
VTB Capital is active in corporate finance, equity capital markets, mergers and acquisitions, asset management and other investment banking services.
GULF EXPANSION
VTB Capital launched its operations in the Gulf on Sunday in Dubai with 10 staff to boost business between the two regions. It is aiming within a year for the Gulf to contribute about 5-10 percent to its profits.
"Generally speaking there has been very little interaction (between Russia and the Gulf), surprisingly little interaction both at the government level and at the corporate level -- we would like to be instrumental in growing that particular interest on both sides," Soloviev said.
The Moscow-based company is seeking to bring Russian heavyweights such as Gazprom or Rosneft to the Gulf region, while at the same time directing wealth from the Gulf to investments into large Russian infrastructure projects.
Kuwait's Fouad Alghanim & Sons said on June 6 it had agreed with VTB and Inter RAO to invest up to $1 billion in power schemes as part of a fund for power generation in Russia and the Arab world.
VTB Capital will also develop its Islamic banking business with a subsidiary of Islamic lender Kuwait Finance House and has won mandates from several Russian companies planning to sell Islamic bonds, or sukuk. VTB has three mandates to issue sukuk, each worth between $100 million and $300 million.
Islamic banking is one of the world's fastest growing financial sectors, growing 15-20 percent a year, according to industry estimates.
Soloviev said he would advise VTB Group to enter the retail banking market in the Gulf as it offered plenty of opportunities for international groups.
A growing young population in the Gulf Arab region, rising per capita income and global reliance on the world's biggest oil-exporting region is helping companies grow their businesses as other economies slow down. (Editing by John Irish and Rupert Winchester)