MOSCOW: Russia's sale of a $ 5 billion stake in Sberbank drew strong demand from investors around the world, attracted by the lender's dominant position in a growing domestic market and potential to expand across emerging European economies.
Market sources said yesterday the banks in charge of selling the 7.6 percent stake in Europe's third-biggest lender by equity value were quoting a price of 92-94 rubles per share, and the offering was two times oversubscribed at that level.
While below the government's original hopes for 100 rubles per share, the price guidance is above the 91 rubles that Sberbank had set as the minimum bid.
The final pricing, expected later on Tuesday, will cap a day in which Sberbank met investors in Moscow, London and New York to explain its strategy and answer questions.
In Clothworkers' Hall in the City of London financial district, money managers emerged clutching thick Sberbank documents after an hour-and-a-half meeting with Sberbank management including CEO German Gref, a fitness fanatic and close ally of President Vladimir Putin who has slimmed down the former Soviet state savings bank.
"It looks like a good deal," said one investor leaving the presentation. The investor, who declined to be named, noted Sberbank's focus on transparency and said he had just put in "a significant order" for the stock.
Russia's economy is growing at around 4 percent, providing a healthy backdrop for Sberbank compared with most European lenders, although growth has been slowing as the euro zone debt crisis hits exports of oil and gas.
Having delayed a sale due to volatile financial markets, Russia's central bank has seized on a market rally prompted by stimulus measures in the United States and Europe to cut its 57.6 percent stake in Sberbank through a placement of shares in Moscow and global depositary shares (GDS) in London.
The central bank, representing the state, will keep majority control with a stake of 50 percent plus one share.
The pricing guidance indicates a discount of 3-5 percent to Sberbank's 97.05 ruble close on Friday, and values the 1.71 billion shares being sold at $ 5.14-$5.26 billion. The discount is less than the 10 percent seen on the government's sale of a stake in Russia's No.2 bank VTB last year.
Sberbank's shares were down 0.1 pct at 95.5 rubles on Tuesday. The GDSs could start trading in London as early as Wednesday.
"We are expecting a strong performance in the third quarter so now seems like a good time for the stake sale," said an investor leaving a Sberbank meeting at New York's Four Seasons hotel.
The long-awaited Sberbank offering has revived hopes for Russia's stalled privatization program.
It will also clear a share 'overhang' and allow investors to focus on Sberbank's underlying value, Gref, a liberal economist and former economy minister who took the helm at Sberbank in late 2007, told Reuters on Monday.
Gref has been courting Asian asset managers to back the deal, while local reports said US private equity group TPG, a VTB shareholder, may buy Sberbank stock. A person familiar with the situation said TPG was not investing in Sberbank.
Sberbank enjoys cheap funding through controlling 46 percent of Russian household deposits and has the implicit backing of a sovereign with low debts and the world's fourth-largest gold and foreign currency reserves.
Its 19,000 branches give it unequaled coverage across Russia, the world's largest country by territory, yet the bank is still highly profitable, generating net interest margins of over 6 percent and a return on equity of 26 percent.
Sberbank has also snapped up cheap foreign banking assets, most recently buying Turkey's Denizbank for $ 3.6 billion, although it has said it is not pursuing any further takeovers abroad for now, after criticism from analysts that it was taking its eye off the ball in Russia.
"It attracts huge deposits compared with other banks in Russia and that is a big advantage in terms of margins," said Bruce Bower, a portfolio manager at Moscow-based fund manager Verno Capital who attended the presentation in Moscow.
"Sberbank has the best footprint and the presentations (today) confirmed that too," added Bower, whose fund is already a Sberbank shareholder and was waiting to hear how much stock it would be allocated in the offering.
Sberbank trades in line with emerging market peers in terms of its estimated price-to-book value, which for 2012 is 1.48 times, according to a research note from VTB, while the median for emerging markets is 1.41.
It is cheaper in terms of price-to-earnings, trading at 6.8 times compared with an emerging market average of 10.3 times.
"We think the deal will become the hottest offering of the year and not just in the Russian space," wrote Milena Ivanova-Venturini, analyst at Renaissance Capital, in a research note.
Analysts at Uralsib suggest Sberbank's success could come at the expense of VTB, which is expected to publish not "very bright" second-quarter earnings this week.
Investors flock to Russia's $5 bn Sberbank stake sale
Investors flock to Russia's $5 bn Sberbank stake sale
Gulf-EU value chain integration signals shift toward long-term economic partnership: GCC secretary general
RIYADH: Value chains between the Gulf and Europe are poised to become deeper and more resilient as economic ties shift beyond traditional trade toward long-term industrial and investment integration, according to the secretary general of the Gulf Cooperation Council.
Speaking on the sidelines of the World Governments Summit 2026 in Dubai, Jasem Al-Budaiwi said Gulf-European economic relations are shifting from simple commodity trade toward the joint development of sustainable value chains, reflecting a more strategic and lasting partnership.
His remarks were made during a dialogue session titled “The next investment and trade race,” held with Luigi Di Maio, the EU’s special representative for external affairs.
Al-Budaiwi said relations between the GCC and the EU are among the bloc’s most established partnerships, built on decades of institutional collaboration that began with the signing of the 1988 cooperation agreement.
He noted that the deal laid a solid foundation for political and economic dialogue and opened broad avenues for collaboration in trade, investment, and energy, as well as development and education.
The secretary general added that the partnership has undergone a qualitative shift in recent years, particularly following the adoption of the joint action program for the 2022–2027 period and the convening of the Gulf–European summit in Brussels.
Subsequent ministerial meetings, he said, have focused on implementing agreed outcomes, enhancing trade and investment cooperation, improving market access, and supporting supply chains and sustainable development.
According to Al-Budaiwi, merchandise trade between the two sides has reached around $197 billion, positioning the EU as one of the GCC’s most important trading partners.
He also pointed to the continued growth of European foreign direct investment into Gulf countries, which he said reflects the depth of economic interdependence and rising confidence in the Gulf business environment.
Looking ahead, Al-Budaiwi emphasized that the economic transformation across GCC states, driven by ambitious national visions, is creating broad opportunities for expanded cooperation with Europe.
He highlighted clean energy, green hydrogen, and digital transformation, as well as artificial intelligence, smart infrastructure, and cybersecurity, as priority areas for future partnership.
He added that the success of Gulf-European cooperation should not be measured solely by trade volumes or investment flows, but by its ability to evolve into an integrated model based on trust, risk-sharing, and the joint creation of economic value, contributing to stability and growth in the global economy.
GCC–EU plans to build shared value chains look well-timed as trade policy volatility rises.
In recent weeks, Washington’s renewed push over Greenland has been tied to tariff threats against European countries, prompting the EU to keep a €93 billion ($109.7 billion) retaliation package on standby.
At the same time, tighter US sanctions on Iran are increasing compliance risks for energy and shipping-related finance. Meanwhile, the World Trade Organization and UNCTAD warn that higher tariffs and ongoing uncertainty could weaken trade and investment across both regions in 2026.
