Sberbank
Encyclopedia
Sberbank Rossii ' onMouseout='HidePop("55201")' href="/topics/Sberkassa">Savings Bank
Sberkassa
Sberkassa in the Soviet Union and modern Russia is a financial institution to store the savings of the population. The term is traditionally translated as savings bank, however sberkassas in the Soviet Union were not banks in the usual sense....

 of the Russian Federation") is the largest bank in Russia and Eastern Europe. The company's headquarters are in Moscow and its history goes back to Cancrin
Georg von Cancrin
Count Yegor Frantsevich Kankrin was born Ludwig Daniel von Cancrin in Hanau. He accompanied his father, the mineralogist Franz Ludwig von Cancrin, to Russia in 1797, joining the imperial service and changing his name to Georg. In 1823, he was appointed Minister of Finance and held the office for...

's financial reform of 1841. In many regions Sberbank is practically the only bank capable of providing local administrations with complex banking services and of rendering significant financial support in implementing investment and social programs.

Sberbank is the only bank in Russia to benefit from a government guarantee on deposits. The bank offers a full range of savings, investment, and lending services.

Tsarist period

Tsar Nicholas I established the first private savings institutions in Russia in 1841 when he approved a statute "for the purpose of providing a means for people of every rank to save in a reliable and profitable manner". The next year, savings offices opened in the state treasury departments in Moscow and St. Petersburg. Over the next 20 years, about 45 such offices opened in nearly all of Russia's regional capitals. The State Bank of Russia, or Gosbank, was formed in 1860 and the savings offices were soon transferred under its jurisdiction.

Early Soviet period

By 1924, the chervonets pushed out the old Soviet banknotes and became the sole currency. The State Bank of the USSR, or Gosbank, was established in 1923 and the network of savings banks was reconstituted. Encouragement of savings was a government priority in the late 1920s. The state targeted the general population with the magazine Sberegatelnoe Delo, or "Savings Business," which contained articles by leading government planners.

Control of savings banks was transferred to the People's Commissariat of Finance in 1929. The first Five-Year Plan of 1928-32 set ambitious targets for the promotion of personal savings, but the plan was only about 50 percent fulfilled since few people had any money to save. The situation improved under the second Five-Year Plan. Total deposits grew five times between 1935 and 1940 and reached prewar levels. Meanwhile, the Credit Reform of 1930-32 led to the formation of a system of specialized banks under Gosbank, each with a particular sphere of responsibilities. This system remained basically unchanged through most of the Soviet period.

The savings banks played a large role in funding Russia's involvement in World War II. Not only did they provide loans to the war effort, they also accepted donations from the populace for the defense effort and sold tickets for government-run lotteries that raised money for the war. A rationing system was in place during the war; in 1947, it was repealed and a money reform was carried out in which ten old rubles were exchanged for one new ruble. Those who put their money in savings banks, however, enjoyed a more favorable exchange rate. The network of savings bank branches, which had fallen by half during the war due to occupation of Russian territory, returned to prewar levels by 1952. There were about 42,000 branches in all. They remained under the jurisdiction of the Ministry of Finance, with soviet committees supervising local offices.60s

1960s: Incorporating Sberbank into the Gosbank

Savings offices were transferred to Gosbank, the state bank, in 1963. Gosbank now operated as simply an extension of the government's monetary and economic policy. It carried out all the functions of a central bank as well as a commercial bank: printing money, controlling the money supply, providing credit for industrial enterprises, operating private savings accounts for individuals, and taking care of the accounting and money transfer needs of the federal budget. Citizens brought their money to Gosbank's savings offices because they had no other option. In 1965, economic reforms were implemented to improve planning and make industry more responsive to demand, but the banking system remained fundamentally unchanged.

1985-1990: Perestroika

In the mid-1980s, Mikhail Gorbachev
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev is a former Soviet statesman, having served as General Secretary of the Communist Party of the Soviet Union from 1985 until 1991, and as the last head of state of the USSR, having served from 1988 until its dissolution in 1991...

 launched a policy called "perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...

" which was economic restructuring; Deposits at savings institutions began to increase and a major reorganization of the banking system was implemented in 1988. Gosbank was turned into a central regulatory institution, while five separate banks were created with specializations in particular economic spheres such as foreign trade, agriculture, and loans to industry. One of the newly created banks was Sberbank, whose responsibility was to operate a savings and loan system for workers and average citizens. Sberbank was structured as an umbrella institution for the 15 savings banks of the USSR's republics.

Dissolution of the USSR

In 1990, as the Soviet Union was falling apart, Boris Yeltsin, president of the Russian Republic, declared the Russian Republic Savings Bank (a unit of Sberbank) to be the property of the republic. Yeltsin worked with the bank's chairman, Pavel Zhikarev, to privatize the Russian Sberbank in 1991. It was organized as a joint stock company comprising about 76 regional banks, each with its own particular way of operating. Price controls on consumer goods were removed in 1992, leading to rapid inflation; Sberbank froze depositors' accounts early that year to prevent further growth in the money supply. In 1993, Zhikarev, who had been the bank's chairman for 25 years, was replaced by the deputy chairman Oleg Yashin. The Russian Central Bank acquired a majority state in Sberbank by 1993. The Central Bank and the Finance Ministry made attempts to acquire nearly full control over Sberbank in the early years of its existence, but in the end parliament determined that it should remain an independent entity. Full privatization, however, was postponed indefinitely in 1995 when rumors surfaced that a Russian tycoon with a failed bank in his past was planning to gain control of Sberbank.

The newly privatized Sberbank was a sprawling entity with over 40,000 branches and nearly 90 percent of household savings. Even though it paid interest rates that were often lower than the rate of inflation, Russians who wanted a bank account continued to bring their money to the familiar Soviet institution. Many citizens preferred to keep their savings at home in dollars. Sberbank was saddled with some unprofitable operations, such as the processing of payments for public utilities and the operation of branches in provinces that were served by no other bank.

Meanwhile, during the 90s Sberbank was modernizing and adding services. It signed deals with Hewlett Packard and Unisys
Unisys
Unisys Corporation , headquartered in Blue Bell, Pennsylvania, United States, and incorporated in Delaware, is a long established business whose core products now involves computing and networking.-History:...

 in 1994 to computerize all its branches and implement a central clearing system. Its first ATM
ATM
-In science and technology:*Adobe Type Manager, typeface management software from Adobe Systems Allocated*Air traffic management, synonym for air traffic control*Alternating Turing machine, model of computation used in theoretical computer science...

 opened that year at Moscow's Sheremetyevo airport. Sberbank was also remodeling some of its branches in marble and glass in order to dispel their reputation for dinginess. In the mid-1990s, the bank started construction on a lavish new headquarters in the center of Moscow.

1998 financial crisis

Amid the 1998 crisis, the Russian government introduced a program allowing depositors at the largest banks, such as Inkombank, SBS-Agro, MOST-Bank, and Menatep, to transfer their accounts to Sberbank and take advantage of the government deposit guarantee. However, dollar accounts would be transferred at an unfavorable rate based on the pre-crisis value of the ruble. Sberbank gained about 440,000 new accounts, moving its share of individual accounts to about 85 percent and of corporate accounts to 20 percent. After the crisis, Sberbank continued to shift its focus away from GKOs and toward investment in the private sector of the economy. Its loan portfolio increased between two and three times in 1999 as it lent large amounts to oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....

, natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

, and mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...

 concerns.

Ownership

The Central Bank of the Russian Federation
Central Bank of the Russian Federation
The Bank of Russia or the Central Bank of The Russian Federation is the central bank of The Russian Federation. Its functions are described in the Russian constitution and in the special Federal law...

, also known as The Bank of Russia, is a majority shareholder of Sberbank, owning 60.25% of Sberbank's voting shares with the rest of the shares dispersed among portfolio, private and other investors with an estimated shareholding of about 20% by foreigners.

Management

  • Chairman of the Board and CEO: German Gref
    German Gref
    German Oskarovich Gref , born February 8, 1964) is a Russian economist of German ethnicity, the founder of Center of the Strategic Development. He was the Minister of Economics and Trade of Russia from May 2000 to September 2007...

     (Mr.) (confirmed by the Board of Directors on 16 October 2007)

Largest financing projects

The Bank's largest ten borrowers received RUB 297 billion in 2004. Known projects include:
  • GT TEZ Energo (construction of gas turbine electric power plants)
  • Sevmorneftegaz (Gazprom
    Gazprom
    Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...

    's subsidiary owning licenses for the Shtokman field
    Shtokman field
    The Shtokman field , one of the world's largest natural gas fields, lies in the central part of Russian sector of the Barents Sea, north of Kola Peninsula. Its reserves are estimated at of natural gas and more than 37 million tons of gas condensate.-History:The Shtokman field was discovered...

     and to develop the Prirazlomnoye oil field
    Prirazlomnoye field
    Prirazlomnoye field is an Arctic offshore oilfield located in the Pechora Sea, south of Novaya Zemlya, Russia. The field development is based on the single stationary Prirazlomnaya platform, which is the first Arctic-class ice-resistant oil platform in the world. The commercial drilling is expected...

    )
  • Sayanskhimplast (chlorine and caustic soda production facilities improvements)
  • The "Svyazinvest
    Svyazinvest
    OJSC Svyazinvest is Russia's largest telecommunications holding company founded according to the decree No 1297 of Russia's government on November 25, 1994, as a 100% state-owned company and registered on September 18, 1995....

    's 2004 investment programme"
  • Ilyushin Finance Co. (lease for three aircraft)
  • Delta Telecom's (St. Petersburg cell network)
  • Sukhoi's Su-35 project (long-term funding of the production)
  • Funding of the Khmelnitsky
    Khmelnytskyi, Ukraine
    Khmelnytskyi is a city in Ukraine in the region of Podillia. It is located on the Southern Buh River and about from the Ukrainian capital, Kiev. The town's original name was Płoskirów, later Proskurov, but in 1954 was renamed Khmelnytskyi. It is the center of the Khmelnytskyi Oblast in western...

     nuclear power plant in Ukraine for finishing blocks 2&3 until 2016

Export Credit Agencies relationships

Sberbank signed cooperation agreements with several Export Credit Agencies
Export Credit Agencies
An export credit agency or Investment Insurance Agency, is a private or quasi-governmental institution that act as an intermediary between national governments and exporters to issue export financing...

 (ECAs) in 2004 including Eximbank USA
Export-Import Bank of the United States
The Export-Import Bank of the United States is the official export credit agency of the United States federal government. It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring...

, Eximbank Hungary and the Israel Foreign Trade Risks Insurance Corporation. Sberbank has also cooperated with OeKB, ECGD, Euler Hermes
Euler Hermes
Euler Hermes is a French credit insurance company majority-owned by Allianz France which is in turn owned by Germany's Allianz SE.It claims to have 36% of the total credit insurance market. Euler Hermes is the result of the acquisition of Allianz's Hermes by AGF's Euler in 2002...

, SACE
Servizi Assicurativi del Commercio Estero
SACE S.p.A. is the Italian export credit agency.It is governed by Giovanni Castellaneta, the ex Italian ambassador to the USA.-History:SACE was established in 1977 following the Law 227/77 as Special Section for Export Credit Insurance of National Insurance Institute...

, CESCE
Češće
Češće is a village in the municipality of Hadžići, Bosnia and Herzegovina.-References:...

, EDC (Canada), Atradius
Atradius
With an estimated 31% global market share, Atradius is one of the world’s largest trade credit insurers. The company, rated A- by Standard and Poor turned over €1.5 billion in 2010....

 (Netherlands), KUKE (Poland), COFACE (France), Finnvera (Finland), EGAP (Czech), EKN (Sweden), ERG (Switzerland), NEXI (Japan) and Japan Bank for International Cooperation.

Subsidiaries

  • Sberbank Rossii (Kazakhstan) (former Texakabank)
  • Sberbank Rossii (Ukraine) (former NRB)
  • BPS-Bank (Belarus)

See also

  • Vneshtorgbank
    Vneshtorgbank
    Bank VTB , former Vneshtorgbank, is one of the leading universal banks of Russia and the largest in terms of authorized capital....

     (VTB Bank)
  • Sberkassa
    Sberkassa
    Sberkassa in the Soviet Union and modern Russia is a financial institution to store the savings of the population. The term is traditionally translated as savings bank, however sberkassas in the Soviet Union were not banks in the usual sense....



External links

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