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. Last Updated: 07/27/2016

Sberbank Leaves Soviet Era

This week Hewlett-Packard announced that it had signed an agreement with Sberbank Russian Federation for over 9,000 personal computers worth $23 million. If the deal goes through, and there is no reason to believe that it will not, this will be one of the largest-ever PC purchases made in this country.


The deal illustrates just how far Sberbank has come in making a successful transition from the Soviet era. From the fractious organization barely in control of its own branches that it was two years ago, it is now well on the way to becoming Russia's first major retail bank and one of the largest single customers for the information-technology industry.


Like many Russian institutions, Sberbank experienced a difficult period of adjustment following the collapse of the Soviet Union.


It was historically part of Gosbank -- the Soviet-era predecessor of the Central Bank of Russia. Between 1991, when it became an open joint-stock company, and May 1993, when the Central Bank of Russia bought a majority stake, different interest groups within the bank fought for control.


During that period it appeared to computer suppliers that the bank's regional centers were moving towards complete autonomy. Each separately approached Western companies and each seemed to have access to money.


In November 1991 Sberbank Russian Federation asked foreign companies to submit bids for a project to install computers in all 43,000 Sberbank sites. NCR announced that it had won this huge $175 million contract only to admit later it had never been paid. At this time it was very unclear who exactly was in charge at the bank.


A representative for NCR says it became a deal with multiple customers and it was impossible to sell it to everyone involved. Each depended on government grants and enthusiasm for it changed like the wind.


Yet since that time a stable leadership has emergedat Sberbank Russian Federation and it has been clawing back control over the vast network of branches and agency sites. A computerized clearing system is central to this process. Collecting payment and fund transfer information from branches will enable Sberbank Russia Federation to regain full control over all of its assets. It will also eventually enable it to become a real retail bank, offering the kind of services that commercial banks are now offering to only a small section of the population.


There are three tiers in the Sberbank network, made up of 78 regional centers, 2,300 branches and around 43,000 agency sites. In March, Unisys Corp. announced that it had won a $127 million contract to create a regional clearing system which will eventually embrace the top two of these layers. It is the first phase of this project, which links each of the regional centers, for which the Hewlett-Packard PCs have been bought. The next phase, taking the technology to branch level, is planned to begin in 1995.


A fundamental difference between the situation now and three years ago is that today Sberbank Russian Federation undeniably has money.


Today it and Sberbank Moscow have large head-office buildings which are the match of any of the commercial banks. In its annual report last year, Sberbank Moscow announced an operating profit of several million dollars.


During the last few months various parts of Sberbank have signed equipment contracts worth tens of millions of dollars.


Just after Unisys had announced its clearing system deal, Sberbank Moscow signed a series of contracts with IBM and a group of other suppliers to create an on-line network linking its 800 city sites to a central computer center.


The network will enable Moscow customers to make use of card-based systems and could lead to the introduction of automatic teller machines in the city's branches, as Sberbank has this week done at Moscow's Sheremetyevo-2 airport. However, quite where all of this money comes from remains a mystery. As one company which has worked with Sberbank for several years told Computer Business Russia : "We don't know and we never ask."





Robert Farish is the editor of Computer Business Russia. Tel/fax: 265-4214.