Top > Business > 2007 > March > 2007-03-06

Secondary Offering for Russian Bank Pulls in $8.8 billion

Sberbank, Russia`s largest government bank raised $8.8 billion in a in a secondary stock offering that closed on Wednesday, the Russian Minister of Finance, Aleksei L. Kudrin, announced last week. According to Kudrin, Sberbank`s board of directors set the price of $3,398 a share. Analysts expected the stock offering would yield up to $12 billion, if all the 3.5 million shares offered are sold. Kudrin`s announcement stated only 2.6 million were sold.

Sberbank is Europe`s 11th largest bank in terms of market share. It operates 20 thousand braches across Russia. Approximately 36% of the company?s shares are traded in Russian stock exchanges. The company is not traded in stock markets outside of Russia. The Russian Central Bank, which owns the remaining 64%, announced it intends to purchase 900 thousand new shares in the secondary offering, which is supposed to reduce its ownership of the bank to less than 60%. Only 20% of the shares in circulation are owned by foreign investors.

Sberbank`s secondary offering is the first in the expected series of public offerings of Russian company shares this year in foreign and domestic stock exchanges. The government owned bank Vneshtorgbank and the private bank Rosbank are expected to be among the companies to offer the public shares this year. During July last year, the Russian national oil company, Rosneft, pulled in $10.4 billion in a public offering in Moscow, which was at the time the fifth largest stock offering in the world and the largest ever in Russia. Severstal, the Russian steel producer sold 9% of its shares, in November, generating $1.1 billion.