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. Last Updated: 07/27/2016

Sberbank Plans to Sell Seized Assets in 3 Years

SOCHI — Sberbank hopes to sell assets — from shops to oil fields — acquired through unpaid loans during the crisis within three years, chief executive German Gref said Saturday.

“Our job is finance. … We must, as quickly as possible, get rid of these assets,” Gref said at an economic forum in Sochi. “We are already among the top three biggest retailers in the country, and a large oil company. If we start doing [rail] freight, and Russian Railways starts opening bank branches, it won’t work at all.”

Gref later told reporters that he hoped to sell such assets within the next two to three years.

“Some of the assets we will sell immediately, and some will need certain restructuring and an injection of additional financing,” Gref said.

State-owned Sberbank has already assumed control of oil fields from Urals Energy, several real estate projects and a chain of shops, while collateral on its books includes an airline. Gref’s sentiment matches that of the government, which has said it will auction off any assets acquired through companies unable to repay loans granted as part of the state’s anti-crisis plan.

Still, Sberbank diversified its business when it jointly with Canada’s Magna recently agreed to buy a majority stake in German carmaker Opel from General Motors. Unlike VTB, Sberbank has managed to remain in profit. Gref reiterated that provisions were 2.5 times higher than actual bad loans on its books.

“The past year was such a storm that only a really powerful ship, like Sberbank, could survive,” he said.

The bank remains committed to keeping its network 20,000 branches, Gref said. “We would have had to shut 1,500 branches this year as unprofitable, but we are holding them,” he said, adding that a maximum of 150 branches could be closed.

Asked about Prime Minister Vladimir Putin’s call for banks to lower interest rates on loans to 6 percent in the coming years, Gref said that would only be possible if inflation was 1 percent to 2 percent, compared to about 12 percent currently.

He noted that another condition would be to lower the Central Bank’s refinancing rate to 2 percent from the current 10.50 percent.

Gref also said Sberbank might buy back its shares from the market in order to carry out a stock options program for management, but no decision had yet been made. He declined to give further details.

A source said Friday that the buyback idea had been on the agenda for the last board meeting Thursday but was taken off the agenda because it had “not been fully prepared.”

Sberbank’s chief financial officer Anton Karamzin said any possible buyback would involve less than 1 percent of the bank’s stock.