Sberbank of Russia

Coordinates: 55°41′55.69″N 37°34′45.54″E / 55.6988028°N 37.5793167°E / 55.6988028; 37.5793167

Sberbank
Сбербанк

Type	Public (PAO)
Traded as	MCX: SBER
Industry	Banking, Financial Services
Founded	1841 (1841)
Headquarters	Moscow, Russia
Key people	Sergey Ignatiev (Chairman of the Supervisory Board) Herman Gref (CEO, Chairman of the Executive Board)
Products	consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, private equity, savings, Securities, asset management, wealth management, Credit cards
Operating income	RUB 1300.7 billion (2014)
Net income	RUB 290.3 billion (2014)
Total assets	RUB 25.201 trillion (2014) [1]
Owner	Central Bank of Russia (51%)
Number of employees	over 325,000 [2]
Subsidiaries	Sberbank CIB Denizbank Subsidiaries in various European and post-Soviet countries
Rating	Ba2 (Moody's), BBB- (Fitch) (2017)[3]
Website	www.sberbank.com

Sberbank (Sberbank, Russian: Сбербанк, initially a contraction of "сберегательный банк" - sbieriegatielny bank; English: "Savings bank") is a state-owned Russian banking and financial services company headquartered in Moscow. The company was known as "Sberbank of Russia" until 2015. Sberbank has operations in several European and post-Soviet countries. As of 2014 it was the largest bank in Russia and Eastern Europe, and the third largest in Europe, ranked 33rd in the world and first in central and Eastern Europe in The Banker's Top 1000 World Banks ranking.^[4]

History

Russian President Putin visits a Moscow branch of Sberbank, November 2001

Russian coin commemorating the establishment of the first savings banks in the Russian Empire in 1841.

Early history

Sberbank's history goes back to Cancrin's financial reform of 1841,^[5] when a network of the first state-owned savings banks was created in Russia. By the end of the 19th century, the network reached almost 4 thousand outlets with over 2 million depositors.^[6]

Since 1905, savings bank outlets became authorised to sell insurance. After 1910, savings banks started subsidising credit cooperation institutions and extending loans to small lenders. In 1915, savings bank outlets started accepting government securities for depositing.^[7]

Soviet savings banks system

After the October Revolution of 1917, the state savings banks system continued its activity and growth under the management of the Finance Ministry of the USSR as the State Labour Savings Banks System. From 1926, the saving bank outlets were used to pay wages to blue- and white-collar workers. The savings banks were used to distribute state lottery tickets and for the placement of state bonds with the population. The savings banks introduced wider services such as money transfers.^[8]

By late 1980s, the Soviet savings bank system had almost 80 thousand branches. As part of Perestroika reforms, in 1987 the savings bank outlets are reorganised into the Savings Bank of the USSR. Within the Savings bank of the USSR,^[9] separate savings banks were created in the Soviet Republics. Following the dissolution of the USSR, the former republican savings banks became state savings banks of the newly independent post-Soviet states.

In 1991, the Savings bank of the RSFSR has been reorganised into the Joint-Stock Commercial Savings Bank of the Russian Federation (Sberbank of Russia).

Sberbank of Russia

In post-Soviet Russia, Sberbank is the largest universal bank despite growing competition from private and other state-owned commercial banks. The bank has gradually expanded its international presence.^[10]

Since 2007, Sberbank is led by former economy minister Herman Gref.^[11]

Volksbank International acquisition, 2011

In 2011, Sberbank acquired Volksbank International AG from its shareholders Österreichische Volksbanken AG, BPCE, DZ Bank and WGZ Bank. The deal included all VBI assets - banks in Slovakia, Czech Republic, Hungary, Slovenia, Croatia, Ukraine, Serbia and Bosnia and Herzegovina, except for Volksbank Romania. The agreed price was €585 to €645 million, depending on VBI business performance in 2011. VBI’s total assets excluding Romania was €9.4 billion in June 2011.^[12]

Denizbank acquisition, 2012

In June 2012 Sberbank bought the Turkish DenizBank for Turkish Lira 6,469 billion (about EUR 2,821 billion or US$3.504 billion) from the lender Dexia, which in 2011 was "partly nationalized by the governments of France, Belgium and Luxembourg".^[13] The deal included DenizBank subsidiaries in Turkey, Austria and Russia.^[14]

US and EU sanctions, 2014

After the annexation of the Crimean Peninsula by Russia in 2014 the Obama administration imposed sanctions, to which the US Department of Treasury added new prohibitions in September 2014, coinciding with EU sanctions.^[15] Sanctions consist of access restriction to the EU and US capital markets.^[16][17][18] After announcement of the sanctions, and by the end of July, Sberbank's market value had dropped the most market value among the world’s major lenders plus investors moved $22 billion from Sberbank’s market capitalization.^[19] Still, during the following year Sberbank’s share price grew back 89%.^[20] Sberbank together with other Russian banks filed claims with the highest EU court to lift the punitive economic measures.^[21]

Ownership

The majority shareholder of Sberbank is the Central Bank of the Russian Federation, owning 50%+1 voting share of Sberbank's voting shares. The rest of the shares is dispersed among portfolio, private and other investors with an estimated shareholding of over 43% held by foreigners.^[22]

Russia's central bank cannot sell its stake without a change in Russia's laws.^[23][24]

Management

The President and Chief Executive Officer is Herman Gref, confirmed by the Board of Directors on 16 October 2007.

The Chairman of the Supervisory Board of Sberbank is Sergey Ignatiev, former Chairman of the Central Bank of the Russian Federation.

Operations

As of 2015 the bank had about 16,500 offices with over 250,000 employees.^[25] According to own estimates, the bank had over 137 million retail clients and over 1.1 million corporate clients in its 22 countries of presence.

As of August 2015 it accounted for 28.6% of aggregate banking assets, calling itself "the circulatory system of the Russian economy","key lender to the Russian economy and the biggest receiver of deposits".^[25]

Within Russia, Sberbank is structured into several regional divisions (territorial banks):

ATM of Sberbank.

Sberbank regional head office in St. Petersburg

Sberbank sign in Russian and Altai language in Ust-Koksa, Altai Republic

Sberbank office in Khabarovsk

Sberbank office in Novosibirsk

Sberbank office in Tyumen

Sberbank in Smolensk

Baikal Bank	Zabaykalsky Krai  Irkutsk Oblast  Buryatia  Sakha Republic
Volga-Vyatka Bank	Nizhny Novgorod Oblast  Vladimir Oblast  Kirov Oblast  Mordovia  Mari El  Chuvashia  Tatarstan
East Siberian Bank	Krasnoyarsk Krai  Tuva  Khakassia
Far Eastern Bank	Khabarovsk Krai  Primorsky Krai  Amur Oblast  Sakhalin Oblast  Jewish Autonomous Oblast  Magadan Oblast  Kamchatka Krai  Chukotka Autonomous Okrug
West Siberian Bank	Tyumen Oblast  Omsk Oblast  Khanty-Mansi Autonomous Okrug  Yamalo-Nenets Autonomous Okrug
West Urals Bank	Perm Krai  Komi  Udmurtia
Moscow Bank	Moscow
Volga Region Bank	Samara Oblast  Ulyanovsk Oblast  Orenburg Oblast  Saratov Oblast  Volgograd Oblast  Astrakhan Oblast  Penza Oblast
Northern Bank	Yaroslavl Oblast  Kostroma Oblast  Ivanovo Oblast  Vologda Oblast  Arkhangelsk Oblast  Nenets Autonomous Okrug
North Western Bank	Saint Petersburg  Leningrad Oblast  Murmansk Oblast  Kaliningrad Oblast  Pskov Oblast  Novgorod Oblast  Karelia
North Caucasus Bank	Stavropol Krai  Ingushetia  North Ossetia-Alania  Kabardino-Balkaria  Dagestan  Karachay-Cherkessia  Kalmykia  Chechnya
Siberian Bank	Novosibirsk Oblast  Tomsk Oblast  Kemerovo Oblast  Altai Krai  Altai Republic
Central Russian Bank	Moscow Oblast  Tver Oblast  Kaluga Oblast  Bryansk Oblast  Smolensk Oblast  Tula Oblast  Ryazan Oblast
Ural Bank	Sverdlovsk Oblast  Chelyabinsk Oblast  Kurgan Oblast  Bashkortostan
Central Black Earth Bank	Voronezh Oblast  Oryol Oblast  Lipetsk Oblast  Kursk Oblast  Belgorod Oblast  Tambov Oblast
South Western Bank	Rostov Oblast  Krasnodar Krai  Adygea

International presence

Sberbank office in Atyrau, Kazakhstan

Belarus	BPS Sberbank
Kazakhstan	Sberbank[26]
Ukraine	Sberbank Europe
Turkey	DenizBank
Austria	Sberbank Europe
Croatia	Sberbank Europe
Germany	Sberbank Europe
Bosnia and Herzegovina	Sberbank Europe
Serbia	Sberbank Europe
Slovenia	Sberbank Europe
Switzerland	Sberbank Switzerland
Hungary	Sberbank Europe
Czech Republic	Sberbank Europe
Slovakia	Sberbank Europe
China	Sberbank International
India	Sberbank International
United States	Sberbank CIB
United Kingdom	Sberbank CIB
Cyprus	Sberbank CIB

In March 2017 Ukraine imposed sanctions on Sberbank (and other Russian state-owned banks operating in Ukraine) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the War in Donbass.^[27] Since then the bank is trying to sell its Ukrainian subsidiary; as of August 2017 it has not been able to do so.^[27]

Sponsorship

Presentation of ice climbing in the Olympic Park of Sochi at the 2014 Winter Olympics, sponsored by Sberbank

Sberbank sponsors sports and charity events in various regions of Russia,^{[28][29][30][31]} as well as educational projects^[32][33] including projects developing financial literacy.^[34][35]

Criticism

Not returning of citizens' deposits

Sberbank is the successor of Soviet saving banks, whose assets belonged to the state.^[36] During Russia's transition to a market economy in the 1990s, in which these assets were sold, Sberbank provided no guarantee for citizens' deposits.^[37] This resulted in a landslide depreciation, which in turn led to severe discontent among the Russian population.^[38] Since 1996, partial compensation for investors' losses has been offered^[39] - however, it must be noted that this only applied to state-owned banks such as Sberbank until 2003, offering them an unfair advantage.^[40]

Low level of service

In the 2000 Sberbank was repeatedly blamed for poor service.^[41][42] Consequently, in subsequent years, Sberbank has introduced new services^[43][44] and improved the quality of some of its existing ones. By the mid-2010s, the bank was reportedly among the market leaders with regards to quality of client services, such as services for retail depositors,^[45] premium services^[46] and several others.

Ukrainian accusation of funding for terrorism in Ukraine

Graffiti "It's a Russian bank" near the department of bank in Oleksandriia, Ukraine

In April 2014, several Ukrainian officials accused Sberbank of funding actions which took place in the East and South of Ukraine, including terrorism. The bank denied any involvement in the financing of illegal activities on Ukrainian territory, which was later confirmed by an examination carried out by the National Bank of Ukraine.^[47]

In late 2013 and early 2014 the bank's network had become a target of the Do not buy Russian goods! campaign. Ukrainian activists appealed not to use Sberbank's services because of their Russian origin. The boycott had become widespread in March 2014 in connection with the Crimean crisis and 2014 Russian military intervention in Ukraine with a wave of protest actions against Russian banks in Ukraine, and against Sberbank in particular. Banks were vandalized in particular after the accusations of funding of terrorism in Ukraine.

March 2017 Ukraine imposed sanctions on Sberbank (and other Russian state-owned banks operating in Ukraine) as part of its continued sanctions on Russia for its annexation of Crimea and involvement in the War in Donbass.^[27] Since then the bank is Ukrainian subsidiary is on sale.^[27] But as of August 2017 it has been unsuccessfully trying to sell the asset after the National Bank of Ukraine blocked the sale of the bank due to a "failure to provide the necessary and sufficient documents to carry out checks on the investors in compliance with Ukrainian law."^[27]

See also

References

External links

Media related to Sberbank at Wikimedia Commons

• Official website