On March 6, South Africa's Standard Bank, the largest African banking group, announced it will buy a 33% stake of Russian investment bank Troika Dialog.

According to the agreement, Standard Bank will pay $200 million in cash that will initially be structured as a convertible loan to Troika.

This loan and Troika's acquisition of Standard Bank's existing operation in Russia, ZAO Standard Bank, is convertible into a 33% equity stake in the merged entity, the banks said.

These transactions are subject to regulatory approvals in both Russia and South Africa.

Standard Bank; the Johannesburg Stock Exchange listed company, said in a statement, The combined operation will have a capital base in excess of $850 million and will be strongly positioned to compete in the Russian financial services sector and to pursue banking consolidation opportunities in Russia.

Moscow-based Troika Dialog focuses primarily on Russia and other countries from the Commonwealth of Independent States, which includes former Soviet republics.

“Russia is the third-largest economy amongst global emerging markets and has considerable resource wealth, Standard Bank said. This presents a strong fit with Standard Bank, a leading emerging market banking group with a strong resource banking franchise.

Troika Dialog's six-member board of directors will be joined by two representatives of Standard Bank.

According to Chairman and CEO of Troika Dialog, the deal would help his firm develop the business in Russia as well as expand our presence to new markets and diversify our client offering, he said in a statement.

In the recent years Russia has seen strong economic growth resulting from high commodity prices, however despite this, Russia has fallen into worst economic turmoil since 1998.

Last year, stocks plunged 74%, making Russia the worst performer among major emerging markets.

Since July the ruble has depreciated by nearly a third against the U.S. dollar. Russia's reserves have fallen by $200 billion and the economy is expected to see a shrinkage of 2% this year.

Standard Bank, one of the big four full-service South African banks, operates in 17 African countries and 20 emerging countries outside of Africa, including Russia, Brazil, and China.