You're reading: Subsidiary Bank of Sberbank of Russia wants to enter top ten largest banks in Ukraine in 2013

Subsidiary Bank of Sberbank of Russia (Kyiv), 12th in size of assets among Ukrainian banks as of early February 2013, at the end of the year plans to enter the top ten largest banks of the country, Board Chairman Ihor Yushko told reporters in Kyiv on Wednesday.

“I think that we’ll be in the top ten if our rivals do not considerably change their strategies,” he said.

Yushko said that at the end of 2012, the bank increased its assets by 59.8%, to UAH 27.03 billion and climbed from 17th to 11th positions in the terms of assets among the 175 banks in Ukraine, although after paying back bonds worth UAH 750 million in January 2013 the bank yielded 11th place to UkrSibbank.

He said that the current economic situation and short-term forecasts for its development and the increased comparison base means the same comparative growth pace cannot be expected this year. However, in absolute figures, Subsidiary Bank of Sberbank of Russia plans to retain them, boosting its credit portfolio by $700-800 million and assets by some $1 billion, which will give a rise of 25-30%, he said.

He added that the situation on the Ukrainian market for banks that are ready to develop will remain favorable, as banks with western capital continue the deleveraging policy, while the labor and commercial real estate market give good changes for business expansion.

Yushko added that the bank, which increased net profit by 71.2% in 2012, still faces a task to ensure the 15% return on equity. He said that this is achieved by high labor productivity and large investment in IT technologies.

He said that particularly, in April the bank plans to start the operation testing of own billing center and the mass payment system designed by Moscow’s SberTech and to launch them finally from September 2013.

In addition, it is planned to actively develop sales via the call center, approximately doubling their share this year to 30-35%, and in the future the bank is trying to increase the share of this most effective channel to 50%.

Yushko also said that this year the bank plans to pay more attention to public crediting.

Commenting on corporate clients, he said that the Sberbank’s subsidiary pays a special interest to the power and transport sector (especially Ukrzaliznytsia), the share of each of the bank’s credit portfolio is 20-25%, and to the potential of developing storage services in the agri-business.

Answering questions about the fate of Volksbank (Lviv), the Ukrainian subsidiary of Austria’s Volksbank International bought by Sberbank of Russia in 2012, Yushko projected that the conceptual decision will be made at the end of this year. He said that the supervision functions over the Ukrainian subsidiary of Volksbank will be transferred from Vienna to Kyiv.

He named three possible options for Volksbank: merger (although the synergy, taking into account assets of UAH 2 billion, will not be large), conversion under a mono product, for example, consumer crediting, and sale.

Yushko added that the Ukrainian subsidiary of Volksbank is one of the best in the group. It operates with profits, so the issue of defining its fate is not urgent.

He also said that Subsidiary Bank of Sberbank of Russia does not sees a chance to enter the domestic bond market due to the current situation, although if the rates fall to 14% per annum and lower the financial institution could enter it any time, having the technical issue of such securities registered in 2012.

Yushko said that external public borrowing by the bank is pointless, as the parental structure ensures it with the liquidity pillow of around $800 million.

Subsidiary Bank Sberbank of Russia (earlier Bank NRB) was founded in 2001. Its only shareholder is Sberbank of the Russian Federation.