Gref Sees Sberbank Profit Reaching Record $6.5 Billion in 2011

OAO Sberbank expects profit to jump more than 20 percent next year from this year’s record as Russia’s biggest lender boosts corporate loans and issues more credit cards, Chief Executive Officer German Gref said.

“We are expecting net income in the vicinity of 200 billion rubles,” Gref told reporters in Moscow late yesterday. That equals $6.5 billion at today’s ruble rate. Profit this year will be “at least” 160 billion rubles, Gref said.

Most of the gain will come from “main operations” rather than from freeing up cash set aside during the global credit squeeze to guard against bad loans, Gref said. The state-run successor to the Soviet Union’s savings bank also expects a “big investment” in information technologies to improve productivity and revenue, he said.

The 169-year-old lender holds almost half of the country’s savings through its network of 19,100 branches across 11 time zones. The bank has about 250,000 employees.

Corporate lending will probably grow about 14 percent next year, while retail lending will surge as much as 23 percent, according to Gref.

The company this month reported net income surged 10-fold in the third quarter to 45.8 billion rubles ($1.49 billion) under international accounting standards.

Dividends ‘Wrong’

Accelerating inflation may force Sberbank to increase its deposit rates in the first quarter, Gref said. Central bank Chairman Sergey Ignatiev on Dec. 9 said rising consumer prices were a “worry.” The bank will next review rates on Dec. 24. The inflation rate reached 8.1 percent in November, the highest level this year, according to government data.

Record profit won’t prompt the bank to increase dividends because it would be “wrong to cash out from the bank,” Gref said. “Shareholders are benefitting from the rising share price,” he said. “We’ll come to a moment when we’ll have to boost our dividend payout, but it won’t be for 2010.”

The stock has gained 29 percent this year, beating the 23 percent gain for the Micex Index of 30 Russian stocks and valuing the company at about $75 billion. That makes Sberbank the third-largest Russian company by market value, behind gas exporter OAO Gazprom’s $151 billion and oil producer OAO Rosneft’s $76 billion.

To contact the reporters on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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