Saving the Savings Bank for Russia
// Addition stock issue approved
The supervisory board of Sberbank, the Savings Bank of Russia, approved the conditions for issuing additional stock worth 200 billion rubles, a new record for the Russian market. In spite of innumerable delays, the stock placement will take place in February as planned, three months ahead of the Vneshtorgbank IPO. Analysts say that the price established by the market for the stock and outside brokers will make up for the fact that the placement will be purely Russian.
Yesterday, after the government session at which the Vneshtorgbank IPO was approved, the Sberbank supervisory council approved the conditions for the placement of 3.5 million addition shares in the bank for a sum of 200 billion rubles. A member of the supervisory board told Kommersant that that all the shares would be placed in Russian exchanges, but with the use of outside brokers. Current shareholders will have maximally advantageous purchase conditions. The price for current shareholder and for investors will be determined from the applications and equal for all. Finance Minister Alexey Kudrin, a member of the supervisory board, said that the placement would take place “in February or at the end of February,” and the interests of Vneshtorgbank and Sberbank would be balanced.
According to the financial magazine Kommersant-Dengi, as of October 1, Sberbank was the largest bank in Russia both in terms of capital (326.4 billion rubles) and assets (3.155 trillion rubles). The Central Bank of Russia owns 63.76 percent of the voting stock (60.57 percent of the authorized capital) of the bank. The remaining shares are divided among several thousand shareholders. As a result of the stock placement, the authorized capital of the bank should increase from 60 billion rubles to 70.5 billion rubles, and the Central Bank' share decrease to 53-55 percent.
At the end of October, first deputy chairman of the Sberbank management board Alla Aleshkina stated at a meeting with analysts that the bank planned to place up to 10 million shares in the first quarter of 2007. The situation is made more intriguing by the plans of Russia's second largest bank, Vneshtorgbank, to conduct an IPO and Russian President Vladimir Putin's desire to “develop the possibility technologically for people to acquire” stock in the two banks. After that, specialists even suggested that the Sberbank placement would have to be rescheduled because of the need to split the stock. The approval by the supervisory council yesterday of the placement prospectus settled many of the questions. As one of the member of the council admitted before the session, the prospectus has to be registered before the end of the year in order to hold the placement in February, and so everything was being done as quickly as possible.
The supervisory board's conclusive decision was met with relief on the market after the lengthy uncertainty. Alex Kantarovich, head of the MDM Bank analytical section, said that the only potential source of dissatisfaction was that, unlike Vneshtorgbank stock, Sberbank's would be placed exclusively on Russia exchanges. “The absence of a double listing in combination with the strong growth of the stock in the past few weeks, suggests the possibility of a technical backlash. Nonetheless, the assumed participation of outside brokers will give the stock strong support and undoubtedly be a positive.” Valery Petrov, chief managing director of UK Alfa Capital, said that the growth of prices that began last week would now slow down. “The fact of the additional stock issue has already been considered in the price,” he said. Alfa Bank senior economist Natalia Orlova noted that “the question of the Central Bank's participation in the Sberbank additional issue has not been decided.”
Now there only remain technical issues to be solved. Not even Russian Prime Minister Mikhail Fradkov's intention to examine the stick placement in the government had frightened analysts. A source on the Sberbank supervisory board told Kommersant that the stock issue would be brought before the government because of a number of technical issues. “The procedure for placing the stock of Sberbank, whose largest shareholder is the Central Bank, on the market requires that,” he explained. He said the government would examine the issue on January 18.
Elena Kiseleva, Igor Moiseev, Anna Inozemtseva
All the Article in Russian as of Dec. 22, 2006
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