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. Last Updated: 07/27/2016

Sberbank Denies Pursuit of Bank Aval in Ukraine

Sberbank is looking into buying one of Ukraine's top-10 banks but denied that it is already planning to buy the local arm of Austrian bank Raiffeisen International.

State-controlled Sberbank, which has a market value of about $50 billion, has a midsized unit in Ukraine but aims to become a big player there and is seeking an acquisition with a well-represented branch network.

Chief executive German Gref, however, denied on Tuesday that the bank intends to buy Raiffeisen's Bank Aval, Ukraine's fourth largest bank.

"No. We plan nothing," Gref told reporters when asked to comment on media reports that Sberbank was considering a possible purchase of Aval.

Raiffeisen International on Monday also had denied a report that it was in talks to sell Aval to Sberbank.

Just a couple of hours before Gref's public comment, however, Dmitry Tarasov, director of the strategic planning department at Sberbank, said the bank was looking at all possibilities, including Aval.

"We are interested in acquisition targets in the top 10 … The aim is to become one of the top five [banks in Ukraine] in three to five years, but organic growth is too slow," Tarasov told reporters, adding that Sberbank would only be interested in taking a controlling stake in any bank.

Citigroup said in a note that Aval — with 5.3 billion euros ($7.11 billion) in assets, 938 outlets and 4.9 million customers as of the end of March — would be "an attractive franchise acquisition for Sberbank."

Sberbank is expected this year to earn at least 100 billion rubles ($3.44 billion). It is a potential bidder for BTA, Kazakhstan's third-largest bank by assets, and has shown an interest in Turkey's Garanti Bank.

Sberbank in 2008 unveiled a five-year strategy to generate between 5 percent and 7 percent of its earnings abroad.