Russia's Sberbank to offer shares for sale

RUSSIA’S STATE banking behemoth Sberbank is to secure a full British listing for the first time with plans to raise an estimated $5.4 billion in a London-Moscow public offering.

In a deal that is seen as a cornerstone of Russia’s privatisation programme, Sberbank’s majority shareholder, the Russian Central Bank, will sell off an additional 7.6 per cent of the bank, reducing its stake to 50 per cent plus one voting share. The bank has a free float of about 42 per cent in Moscow.

Shares will be sold at a price range between 91 roubles a share and the stock’s closing price on the day, with the London global depositary shares representing four ordinary shares. On Friday the stock closed at R97.40, giving the 7.6 per cent stake a value of $5.4 billion.

The long-awaited offering, originally scheduled for a year ago, will give investors a chance to tap into both the Russian banking sector as well as the rapid growth in Russian consumer credit, fuelled by the boom in oil and gas prices.

While Sberbank has unregulated, technical listings in Frankfurt and London, where just 6.3 per cent of its stock is traded, the new offering will represent the first full listing in compliance with the Financial Services Authority.

Sberbank’s assets represent about a third of the Russian banking sector, with R12.4 trillion under management at the end of June. The state lender holds more than 45 per cent of the country’s retail deposits and has 70 million individual Russian customers.

With its number-one position at home secure, Sberbank in recent years has used the instability in European markets to begin looking at assets abroad. Earlier this year, it bought Turkey’s DenizBank from beleaguered Franco-Belgian lender Dexia for $3.6 billion, as well as Volksbanken International, the non-domestic arm of Austria’s Volksbanken, for €505 million.

The bank has also said it could be interested in assets in Poland and opportunities in emerging markets further abroad like China.

German Gref, Sberbank’s chairman, said the secondary public offering was a way to reinforce the lender’s image as an international rather than strictly Russian institution.

No new capital will be raised as part of the offering. – (Copyright The Financial Times Limited 2012)