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Report: Russia should lower holdings in state banks, Sberbank's CEO says

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Report: Russia should lower holdings in state banks, Sberbank's CEO says

PAO Sberbank of Russia CEO Herman Gref proposed that Russian authorities consider the sale of stakes in state-controlled banks, including Sberbank, as an alternative to raising taxes to help finance the implementation of President Vladimir Putin's economic development program announced in May, Vedomosti reported June 8.

The executive said he saw no reason for the state to keep a controlling stake in Sberbank. He also noted that it would be better to privatize state-owned banks than to prohibit them from buying new banking assets, a measure recently proposed by Russia's Federal Antimonopoly Service to reduce the state ownership in the banking sector.

Sberbank is controlled by the Russian central bank, which owns 50% plus one share in the lender. The value of the stake is estimated at around 2.4 trillion Russian rubles, Vedomosti wrote.

Meanwhile, Reuters cited Gref as saying that partnership negotiations with China's Alibaba Group Holding Ltd. failed after one and a half years of talks, and that Sberbank will focus on developing its cooperation with Russian internet group Yandex.

The executive also said Sberbank will get a circa 40% stake in financially troubled Croatian food group Agrokor as the result of debt settlement agreements, and does not plan to sell the stake in the near future, news website Nacional.hr reported June 8. Sberbank, which is Agrokor's largest creditor, will also hold an 18% stake in Agrokor's Slovenian unit Mercator. An agreement regulating the financial situation at Agrokor is expected to be signed around June 28.

Gref also said that Sberbank is eyeing an ROE of around 20% in 2018 under its baseline scenario, and will strive to keep the ratio of operating income to operating expenses below 35%, Kommersant reported June 8. The executive further noted that Sberbank will exit some European markets due to Western sanctions and will focus on such countries as Belarus and Kazakhstan, which offer better development prospects for the lender.

The Russian bank is also in the process of selling its Ukrainian unit and hopes to finalize the sale of Turkey-based subsidiary DenizBank AS by the end of 2018, Gref told Kommersant.

As of June 8, US$1 was equivalent to 62.49 Russian rubles.