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. Last Updated: 07/27/2016

Sberbank Aims for Record $12Bln Float

Sberbank, the country's biggest lender, is seeking to raise a record $12 billion selling shares to fund expansion as growing personal wealth boosts demand for consumer loans.

State-run Sberbank will offer as many as 3.5 million shares for 20 days starting Tuesday, the bank said Monday. The shares last closed at $3,500, valuing the stake at $12.3 billion.

"Sberbank has grown so fast over the past year that it needs to replenish its capital, so it's coming to the equity markets with a potentially record-breaking share issue," said Alexander Kantarovich, head of research at MDM Bank in Moscow.

"A successful sale will allow Sberbank to boost its loan portfolio by tens of billion dollars over the next few years."

Sberbank reported Monday a 38 percent increase in its net profit calculated to Russian accounting standards in 2006 to 89.3 billion rubles ($3.36 billion). The bank, which plans to raise more than $8 billion through a major share offering, reported net profit of 64.5 billion rubles in 2005.

Sberbank's loan portfolio grew by 779 billion rubles from 1.9 trillion rubles one year earlier, while deposits increased to 2.03 trillion rubles from 1.5 trillion rubles.

Sberbank also said its share of retail ruble deposits stood at 56.7 percent, down from 59.7 percent a year ago.

If the issue of 3.5 million new shares is fully taken up, Sberbank would raise at least 228 billion rubles ($8.6 billion) in the largest Russian capital raising after oil firm Rosneft's $10.6 billion flotation last year.

About 37 percent of Sberbank shares are currently in the hands of private investors, including firms controlled by billionaires Suleiman Kerimov and Filaret Galchev and Mayor Yury Luzhkov's wife, Yelena Baturina.

(Bloomberg, Reuters)