Germany's Dresdner Bank is to buy one third of Russia's Gazprombank in a deal worth a reported $800 million.

Gazprombank, the banking arm of Russia’s state oil monopoly Gazprom, said that it expected the deal to be completed early 2006. The deal is intended to increase Gazprombank’s capital before a public share offering in the future.

The deal represents the largest foreign investment in Russia’s banking sector and follows the earlier announcement that Deutsche Bank had bought the remaining 60% in Russian investment bank United Financial Group.

Dresdner is a division of insurance giant Allianz.