Russian Bank Offering Lands $9 Billion

Russian Finance Minster Alexei Kudrin said Wednesday that a new domestic offering for shares in Russia's largest state-controlled bank had brought in $8.8 billion, a Russian news agency reported.

Kudrin was quoted by Interfax as saying that the OAO Sberbank board had set a price of $3,398 per share in the bank, an influx of capital that will help it tap into Russia's boom in consumer lending.

Analysts had predicted the secondary offering could bring in as much as $12 billion if all 3.5 million shares being offered were sold. Kudrin's announcement appeared to indicate that only around 2.6 million shares had been sold, however.

A spokesman for Sberbank could not immediately confirm the report; finance ministry officials could not be immediately reached.

Sberbank is the 11th largest bank in Europe in terms of market capitalization, behind France's Societe Generale, and has 20,000 branches throughout Russia.

Some 36% of Sberbank's shares are traded on Russian exchanges; the company has not listed overseas. The Central Bank, which holds the remaining 64%, has said it would buy 900,000 shares in the new offering, which would see its stake reduced to below 60%.

Of the freely traded shares, only about 20% belong to foreign investors, while a group of Russian tycoons are thought to own 12%. Under the terms of the offering, existing shareholders have been given pre-emptive rights to buy shares.

The Vedomosti newspaper reported Tuesday that unidentified investors who had placed initial bids had been given initial guidance of $3,411 per share, or a 3% discount to the price that Sberbank's shares were trading at on Monday.

That would imply an overall deal value of $12 billion.

Sberbank's offering is the first major offering of what is expected to be a slew of listings by Russian companies this year on domestic and international markets. More companies are seeking to raise funds and expand their business by tempting investors with the promise of high returns on the back of Russia's oil-fueled economic growth. State bank Vneshtorgbank and privately owned Rosbank are among the companies expected to offer shares this year.

Last year's Rosneft offering was hotly anticipated and one of the largest in the world. Steel giant OAO Severstal, meanwhile, sold some 9% of its shares in November, raising $1.1 billion.

Sberbank is expected to use the proceeds to tap deeper into the consumer credit market, such as mortgages and car loans, which has exploded in Russia as high world oil prices have trickled through the economy.