Russia to launch Sberbank stake sale

MOSCOW - Agence France-Presse

Sberbank Chief Executive Officer German Gref speaks to the bank’s board. EPA photo

Russia’s central bank yesterday announced plans to go ahead with the long-delayed auction of a 7.58 percent stake in main lender Sberbank following a recent improvement in global market sentiment. Sberbank had recently purchase Belgian Dexia’s Turkish subsidiary Denizbank.

The Bank of Russia said the sell-off would leave the state holding a 50 percent stake plus one voting share in the country’s main financial institution.

The auction comes in the midst of a three-year $40 billion privatization program designed to kick-start the economy after the marked slowdown that followed the 2008 global financial crisis.

A bank statement said the stake would be auctioned off in both dollars as global depository shares (GDS) on the London Stock Exchange and rubles as ordinary shares appearing on Moscow’s MICEX exchange.

The bidding process was expected to close on Wednesday.

Diversify investor base
“The offerings represent an opportunity for us to further diversify Sberbank’s investor base and secure an international stock exchange listing,” said Sberbank chief executive German Gref.

“We view this as a critical step in our broader plan to reinforce Sberbank’s position as the leading Russian financial institution, and transform it into one of the world’s top performing banks in terms of profitability, operational efficiency and service quality.” The modern version of the venerable tsarist-era bank was founded in 1990 and now plays a pivotal role in the Russian economy while also being one of its most heavily-traded stocks.

Sberbank provides emergency credits to other lenders and holds more than half of the country’s savings. It also issues about a third of its loans.

Its current foreign ownership stake stands at about 20 percent while the other shares are mostly split up among major portfolio investors and trade on the main Moscow exchange.

The bank said it would issue the ordinary shares in Moscow at the initial price of 91 rubles ($2.98) and close the books at that hour’s market value for the stock.

The economic development ministry had earlier valued the 7.58 stake at about ($3.3 billion).

It had initially been due to go up for sale in September 2011 at an early valuation of $7 billion before debt crises in Greece and other European countries forced the idea to be shelved.