Sberbank puts foreign expansion on hold

MOSCOW - Reuters

Russia’s top lender Sberbank is taking a pause in its foreign expansion, though Turkey and Poland remain its key zones of interest, analysts said on Wednesday after a meeting with the lender’s executives.

“Management made it clear that Sberbank is taking a pause in its foreign expansion in what is an uncertain environment, and, acknowledging that management capacity is not unlimited, we welcome this,”
Renaissance Capital said in a note.

Sberbank controls a quarter of total Russian banking assets and half the retail deposits, and its mid-term strategy seeks to generate at least 5 percent earnings outside the country by 2014.
Its net profit target for this year stands at 300-310 billion rubles ($9.5-$9.8 billion), but analysts think the bottom line could hit 320 billion rubles.

Sberbank snapped up VBI, the eastern European arm of Austria’s Oesterreichische Volksbanken, in September, and reiterated that Turkey and Poland were its primary targets for future expansion.

“M&A appetite has been reduced, though Poland and Turkey remain a priority, but now we can expect more of a ‘wait-and-see’ approach and focus on the integration of VBI and (Russian brokerage) Troika,” VTB Capital said in a note on Wednesday.

Sberbank previously ruled out big European acquisitions and dropped out of a race to buy Turkey’s Denizbank last month, considering an acquisition “too complicated”, sources with knowledge of the matter told Reuters.

Both RenCap and VTB Capital said Sberbank sees its loan portfolio growing by 25 percent next year as the base case.