foreign banks

Russia’s largest lender Sberbank on track to profitability, says CEO

Reuters
Russia’s largest lender Sberbank on track to profitability, says CEO

SBERBANK. The logo of Sberbank in Moscow, Russia, December 24, 2020.

Maxim Shemetov/Reuters

Sberbank CEO German Gref expects other currencies, primarily the yuan, to replace the dollar and euro in part

VLADIVOSTOK, Russia – Russia’s top lender Sberbank is on track to profitability and expects positive results this year, chief executive officer German Gref said on Wednesday, September 7, as the Russian banking sector recovers from hefty first-half losses.

Gref, who was speaking during an online press conference at Russia’s Eastern Economic Forum in Vladivostok, declined to give concrete forecasts on Sberbank.

He said Sberbank expected Russia’s gross domestic product to decline 4.5% in 2022.

At the forum, officials have been revising their forecasts concerning the size of the economic hit from sanctions and other restrictions this year.

Russia Economy Minister Maxim Reshetnikov said on Tuesday, September 6, the economic contraction this year would be 2.9%, shallower than previously forecast, while No. 2 lender VTB now envisages a 4% contraction.

Financial sessions in Vladivostok have featured long discussions about the growing use of China’s yuan in Russia’s financial system. Sberbank has already started lending in yuan and VTB plans to do so later this year.

Gref said Russia had fallen out with its traditional partner, Europe, and that a natural consequence of this was Moscow’s closer cooperation and greater dependence on Beijing, something he called the “development of cooperation.”

“I don’t think Russia will return to such a situation of the dollar’s influence on the domestic economy,” Gref told reporters, expecting other currencies, primarily the yuan, to replace the dollar and euro in part.

Earlier in the day, VTB CEO Andrei Kostin said Russia’s banking sector likely no longer needed systemic capitalization, having withstood the most serious effects of Western sanctions imposed against Russia in waves after Moscow sent thousands of troops into Ukraine on February 24.

Gref said Sberbank, which was targeted with sanctions, did not need capitalization, but thanked the central bank for the “extremely necessary” financial support it had extended earlier this year.

Sberbank also plans to develop further in the e-commerce sector, Gref said. – Rappler.com

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