Financial circles hint Sberbank could shut down its operations in the small regional markets.
During the past year, there have been recurring rumours in the Southeast Europe, including Croatia, that the leading Russian banking group Sberbank might leave the region. These speculations have mostly been tied to sanctions (and the Ukrainian crisis), reports Poslovni.hr on March 10, 2016.
Herman Gref, the top official of the banking giant, has recently sparked these rumours again. “Sberbank is in the final stages of forming its European team, and it plans to close some operations in some of the smaller countries in the region”, he said late last month.
Local financial circles are unofficially saying that the Sberbank Europe AG has already hired a consultancy to design a plan for disinvesting its regional operations, including the Croatian branch of the former Volksbank, which became a part of the Russian banking group in the early 2012. The consultants in question are purportedly Ernst &Young. Reporters asked the representatives at the Sberbank’s Austrian office for the comment, but did not get a straight answer about disinvesting the bank’s activities or about hiring the Ernst&Young experts. “We are not negotiating to sell Sberbank Croatia”, was the answer.
But the negotiations are not really what the speculations were about, and the local bankers doubt that the talks will commence anytime soon. But the reason is that they do not see any potentially interested parties which would want to invest in the local banking business, and not the reluctance of the owner to let go of the ownership of the Croatian bank with 9.7 billion kuna in assets and about 2.4 percent of the market share.
In the first three years of the bank’s more offensive approach its assets soared by 40 percent, while last year they fell by more than half a billion kuna. Nevertheless, the Sberbank Europe says it “continues to develop its business model in the central and eastern Europe aimed at creating a stable, profitable and self-financing banking group”. However, the example of the Slovakian branch shows that this does not exclude leaving the regional markets. Towards the end of 2015, Sberbank Europe has sealed the agreement to sell Sberbank Slovensko to the Penta company, a local investment firm owned by two Slovak banks.
This transaction has not been completed as of yet. The deep screening process is currently ongoing. There have been indications about a similar scenario for the Sberbank branches in Hungary and Slovenia, but that story has quieted down. Sberbank’s operations in the region also include the Czech Republic, Serbia and BiH.