Russian President Dmitry Medvedev ordered the government and the central bank to prepare proposals on lowering the state’s share in lenders to less than 50 percent, the Kremlin said.
Medvedev instructed Prime Minister and President-elect Vladimir Putin and Bank Rossii Chairman Sergey Ignatiev to submit the proposals by Sept. 1, according to a statement published on the Kremlin’s website today. OAO Sberbank and VTB Group, the two biggest lenders, are run by the government.
The outgoing Russian leader promised to relinquish control of some of the biggest state companies at the St. Petersburg International Economic Forum last June, saying it was time to reverse the policy of strengthening the government’s presence. The authorities plan to raise more than 1 trillion rubles ($34 billion) from state asset sales from 2012 to 2014, the Economy Ministry said in September. Lenders run or part-owned by the state control more than half of the financial industry’s assets, the Deposit Insurance Agency estimated last year.
Medvedev said Russia will conduct its planned state asset sales with open bidding, seeking maximum prices. The government will soon prepare “road maps,” setting specific dates, according to comments broadcast on state television today.
“This is just posturing and part of the jockeying for position in the new government,” Bruce Bower, a partner at Moscow-based hedge fund Verno Capital, which owns shares in Sberbank and VTB, said by phone. “It doesn’t necessarily mean it will happen, and the proposal may just be dropped.”
Sberbank, Russia’s largest lender, plans on April 16 to start marketing a 7.6 percent stake held by the central bank, people with knowledge of the matter said last week. VTB, which raised $3.3 billion from a secondary public offering in February last year, may sell additional shares, Interfax reported on Jan. 26, citing Chief Executive Officer Andrey Kostin.
“We welcome the proposal,” Sberbank CEO German Gref said in an e-mailed statement. Reducing the state’s control of Sberbank to less than 50 percent will require legislation and may take two to four years, Gref said. “It is important not to hurt existing investors,” he added.
The government may eventually reduce its stakes in banks to zero, central bank First Deputy Chairman Alexei Ulyukayev said July 13.
Sberbank sank 2.3 percent to 96.o1 rubles, its lowest in more than a month, by the close in Moscow. VTB slid 2.1 percent to 6.75 kopeks, its lowest since Jan. 24.