Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Sberbank Shares Issue Could Garner $9.6Bln

A major rights issue by Sberbank, the country's largest bank, may raise up to 252 billion rubles ($9.6 billion), CEO Andrei Kazmin told a news conference Wednesday.

New investors have registered for shares worth 106 billion rubles, Kazmin said. Existing shareholders have already exercised their pre-emptive rights and paid for shares worth 146 billion rubles.

"We have no reason to expect a change in the behavior of investors that are buying shares outside the scope of pre-emptive rights," Kazmin told reporters. "There are no grounds to expect that the tempo will be worse than with the pre-emptive rights."

Under local market rules, the share offering -- the second largest by a Russian company after last year's $10.6 billion float by oil firm Rosneft -- resembles an option.

That means investors are not obliged to pay for the shares for which they have registered, creating uncertainty over the final proceeds from the issue, which opened in early February and closes on March 21.

State-controlled Sberbank's shares slipped Wednesday below the rights issue price of 89,000 rubles ($3,400) per share, trading down 3.5 percent at 88,800 rubles amid global stock market weakness.

The shares also slumped below the issue price March 5 before rallying late in the session on what traders and analysts said appeared to be concerted buying. Kazmin denied that there had been any market support operation.

"The state did not spend a single ruble on supporting the Sberbank share price, and Sberbank itself did not buy," Kazmin told the televised news conference.

Kazmin said Russian rules designed to prevent share issues from being exploited by money launderers had posed problems for both the bank and investors, and he said Sberbank would propose improvements to the mechanism.

But he said he was satisfied with the results so far: "The amount we see is quite sufficient to maintain our current pace of growth for at least the next three years," he said.

Depending on final results, the voting stake of the Central Bank -- which did not exercise its pre-emptive rights in full -- may fall to 59.6 percent while foreign investors' holdings may rise to 21.8 percent from 20 percent, Kazmin said.

He also said Sberbank hoped to complete a share split this year, subject to shareholder approval. "We are inclined to make such a decision, but our shareholders have the final say," he said. "I hope to achieve this in this year.

Sberbank's shares are the highest-priced on the Russian market. Analysts have long called for the bank to conduct a 50-for-one share split to bring the nominal value of Sberbank's ordinary shares into line with its preferred stock.

Kazmin also said Sberbank posted a net profit in the first two months of this year, to Russian accounting standards, of 14 billion rubles. He gave no comparative figures but said the results showed an improvement on one year earlier.