A man passes by the Sberbank headquarters in Moscow in this 2011 file photo.DENIS SINYAKOV
From the FT's Lex blog
What is the best way to "buy" Vladimir Putin - without getting too close to Russia's re-elected president, that is? One way was via last week's $7-billion eurobond issue, one of the biggest emerging-market sovereign offerings in more than a decade. Economically, the country's short-term outlook is rosy enough: real gross domestic product growth was 4.3 per cent last year, although it could slow a tad to 4 per cent this year as Russia plays catch-up after the elections. The oil price, at about $122 per barrel, is also $5 above the level required to balance the budget.
However, a smarter buy - capturing exposure to the improving Russian economy more fully - would be a slice of Sberbank. True, the state-controlled bank, like its rival VTB, is subject to the Kremlin's whims. But the government wants to sell about 7.5 per cent of it locally and abroad. Sberbank, with a market value of around $70-billion, is roughly the same size as Spain's Santander.
Conveniently for marketers of the stake, the Russian lender is on a roll. Net profit increased by nearly three-quarters to 315 billion rubles ($11-billion) in the year to December, as economic pressures eased, and gross loans grew by a heady 35 per cent. This also helped bad loans to fall from 7.3 per cent to 4.9 per cent of the loan book (the opposite trend to Spanish banks, whose domestic lending has slowed). And Sberbank's net interest margin was 6 per cent.
Not everything is going the Russian bank's way, however. One-off charges and investment outlay lifted costs by a third, more than double the pace of income. Even so, Sberbank is enviably efficient for a bank with a branch in just about every Russian town: it costs just 47 kopecks for each ruble of income.
With a return on equity of 28 per cent (up 700 basis points in a year), no real competition, and a valuation about 1.7 times its book value (putting it roughly in between crisis-weary euro zone banks and Canada's boring but sensible lenders), Sberbank almost sells itself.