World Economy

Sberbank May Be Privatized

Sberbank May Be PrivatizedSberbank May Be Privatized

The Russian Ministry of Economic Development will prepare proposals on the privatization of Sberbank and VTB, Economic Development Minister Alexey Ulyukayev told journalists Sunday. “Yea, we will make proposals,” he said, answering the question of whether the ministry will propose privatization.

At the same time, according to Ulyukayev, it is necessary to accept changes to the legislation in order to sell Sberbank. Earlier Ulyukayev said that Russians began to consume less and save more money, Tass reported.

Therefore, an advanced banking system is needed, which would be able to “recycle” that amount of savings. In order to do that it is necessary to increase the capitalization of banks, which is possible through the privatization of Sberbank and VTB, he said.

According to Deputy Finance Minister Alexey Moiseev, these credit institutions should be also privatized to create a competitive environment. The Head of Sberbank German Gref said he had a positive attitude towards the idea of selling Sberbank shares, but so far the issue was not discussed with the government.

Earlier Ulyukayev said that anti-Russia sanctions are not the key obstacle for privatization of Russian lenders VTB and Sberbank. “Of course, sanctions drag (privatization) but it’s technically possible even under sanctions regime to carry out privatization transactions,” he said, adding that Russia has “hundred opportunities” for privatization and has domestic demand for those assets. “However, we should first take a conceptual decision, we have legislative limitations and other limitations, which should be worked out, while the execution of a deal is not a problem,” Ulyukayev said.

The most critical phase in Russia’s banking sector development is over, Gref had told German’s Handelsblatt published on November 23. “We were in a veritable crisis, but the most critical phase is over,” he said. The bank managed to adapt to the situation, he had said responding to the question regarding the impact of western sanctions on Sberbank’s operations. “We have now weathered the worst, and the situation has normalized completely,” Sberbank CEO added.

Meanwhile, Sberbank believes the situation in Russia’s banking sector is a large-scale crisis, Gref said. The next year will also be a challenging one, the banker said.

Sberbank is working very closely with Asian partners. “Now we are borrowing money primarily in China, though not as much as we would like to… And if the sanctions continue, we will have no alternative to China,” he added. Sberbank’s profits “will be down by 25 to 30% in 2015,” the banker said. “However, we will certainly be more profitable in 2016 than today,” he added.