Minister for Economic Development suggests further privatisation of Sberbank

Author: us-russia
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Minister for Economic Development suggests further privatisation of Sberbank
Published 14-03-2013, 14:57
News: Minister for Economic Development Andrei Belousov has suggested in a letter to First Deputy Prime Minister Igor Shuvalov that the state's share in Sberbank decline proportionally with that in VTB, Interfax reports. The current privatisation programme suggests full privatisation of VTB by 2016. Belousov proposed that should the government decide to decrease the state's participation in VTB to below 50% (from 75.5% at present), it ought also to consider selling a proportional stake in Sberbank (the CBR currently holds 50% +1 share).

Our View: This statement increases the risks of another Sberbank SPO. In 2013, VTB plans to hold an SPO with the state's share likely dropping (although the government will probably keep a controlling stake). Meanwhile, in the near term, privatising more of the bank could push the share below 50% which, according to Belousov, might trigger the sale of Sberbank's shares.

Currently, the banking law protects the share of the CBR by setting a minimum level at 50%. Chairman of the CBR Sergey Ignatiev has also constantly opposed any reduction in the stake. Meanwhile, should the new head of the CBR (to be appointed by 24 March) agree with the further privatisation of Sberbank, that would increase the price overhang risks for the stock in the medium term.

For example, in our view, the appointment of Elvira Nabiullina (aide to the President; Putin nominated her yesterday) might facilitate a further reduction in the state's presence in Sberbank. Reportedly, Nabiullina, Belousov and German Gref (Sberbank CEO) support the idea of privatising Sberbank, with Gref claiming a number of times that a blocking stake would be enough for the state.

Mikhail Shlemov
Svetlana Aslanova

 

VTB Capital
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