Margin Calls Batter Sberbank Shares

bloombergA woman walking by a Sberbank branch in Moscow. The bank's shares fell as much as 5 percent in afternoon trading.
Shares in Sberbank closed up after a 5 percent afternoon decline as trade sources said Monday that the share was hit by margin calls and worries about the financial crisis.

"No one has canceled the overhang of sales and margin calls," said Andrei Kukk, head of trading at Bank UralSib.

The share closed up 1.3 percent at 26.51 rubles after falling as much as 5.3 percent during afternoon trade on the MICEX exchange, whose main index closed up 4.5 percent.

Reuters data showed that Monday's traded volume in Sberbank shares was more than 300 million shares, double the 90-day average volume. The five-day average volume was 33 percent above the 90-day average, the data showed.

Steep declines on the country's stock market have been accelerated by fears that billionaires could face margin calls on loans backed by their equity holdings.

Sberbank CEO German Gref said in July that billionaire Suleiman Kerimov was the bank's largest single private holder with a stake of 1.5 percent to 2 percent after he sold a 4 percent stake earlier in the year.

Cement baron Filaret Galchev said in June that he owned 1.85 percent.

An official at Kerimov's Nafta Moskva holding company declined to comment, citing the company's press policy. A spokeswoman for Galchev's company could not be reached.

The bank reported a 40 percent increase in first-half net profit Monday, but analysts were concerned by weaker return on assets even in the quarters before higher financing costs began to be felt. "Net interest income was weaker than expected, driven by a 42 basis-point decline in net interest margin on average assets over the quarter. ... We see this as a key negative given that the street is forecasting a sharp increase in Sberbank's margins," Citigroup said in a note.