political – backdrop in Russia, the country’s largest banking
group, Sberbank, has rolled out a five-year strategy plan
underpinned by an ambitious target: to become a global banking
giant by 2014.
Herman Gref, the bank’s chairman, stated at a recent news
conference that he will take advantage of the global banking crisis
to expand into neighbouring markets such as India and China.
Go deeper with GlobalData
According to the strategy document, Sberbank – which dominates
the Russian market with over 20,000 branches, a 51 percent share of
deposits and 31 percent in retail lending – plans to double group
profit by 2014. It wants a 20 percent increase in the bank’s return
on equity and a rise in the bank’s share of the Russian banking
system’s total assets by 5 percentage points to 30 percent.
The bank’s staff is to be reduced by 3-5 percent per year, to a
headcount of 210,000 by 2014.
Gref stated that Sberbank is estimating its assets will expand
15 percent in 2009, lower than initially forecast due to increasing
levels of risk and overdue debts. However, after 2009, asset growth
will accelerate. Gref said he believed that during the next five
years, Russian banks will be increasing their assets by 15-25
percent a year, and by 2014 aggregate assets will reach 70-80
percent of GDP.
Much-needed industry consolidation
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By GlobalDataIn addition, he said, the Russia banking sector will see still
more M&A activity as much-needed industry consolidation
continues.
The first of such mergers has already happened:
Moscow-headquartered MDM Bank and Siberia-based URSA Bank, Russia’s
13th and 15th largest banks, respectively, by assets, have
announced plans to merge to form the country’s second-largest
private sector bank (see Russian consolidation gathers
pace).
Announcement of the deal coincided with a comment by the
president of the country’s regional bank association, Anatoly
Aksakov, who said around 300 of the country’s 1,079 banks will need
to merge or close.
In mid-November, Sberbank announced that its net profit rose 27
percent year-on-year to RUB102 billion ($3.7 billion) in the first
nine months of 2008, with corresponding increases in consumer
lending and deposits boosting performance.
Loans to individuals totalled RUB1.25 trillion, a 32 percent
rise over the first nine months of 2007.
Deposits from individuals totalled RUB2.91 trillion as of 1
November, following a sizeable deposit outflow of RUB95 billion in
October, a month when confidence in the state of the Russian
economy began to dwindle.
In order to calm the nerves of depositors, the Russian
government raised the protection on retail deposits to
RUB700,000.
Since then, Sberbank said, the position had improved, with
deposit inflows of RUB18.5 billion in the first week of December,
more than in the whole of November when net deposits totalled RUB11
billion.
Austria’s Raiffeisen became the largest foreign banking group in
Russia in November last year when it merged two subsidiaries,
Impexbank and Raiffeisenbank Moscow, into one to form the country’s
seventh-largest bank by assets (see RBI 588). Other major
international players in the market include UniCredit and KBC;
Rosbank, in which Société Générale has a 50 percent plus one share
stake, is Russia’s fourth-largest bank by number of outlets
(700).
