Russia's biggest bank enters the region

06/08/2012

Some analysts argue that the entry of Russia's Sberbank into regional markets is a good thing because it diversifies banking.

By Ivana Jovanovic for Southeast European Times in Belgrade -- 06/08/12

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Volksbank branches were acquired by Sberbank. [Nada Bozic/SETimes]

Russia's biggest bank, Sberbank, acquired the Austrian-based financial conglomerate Volksbank International AG Group and will take over Volksbank’s branches in Bosnia and Herzegovina (BiH), Croatia and Serbia.

The acquisition took six months, resulting in a significantly reduced price of 505m euros.

"Sberbank's entry will increase competitiveness in regional banking because it is the biggest Russian bank and a significant one on a European scale," according to Goran Nikolic, economist at the Centre for European Studies in Belgrade.

"The influence of Russian capital in the region becomes strengthened with the appearance of Sberbank," Nikolic told SETimes. Russian banks Moscow and Gazprom already operate in Serbia.

Marko Djogo, head of the banking section at the Republika Srpska Association of Economists, told SETimes that banking diversification is a welcome development, particularly from the US, Russia, China and Turkey.

"It could reduce the local banking risk connected with the economic situation in the countries of their 'mother' banks," Djogo said.

Sergey Gorkov, deputy chief executive officer in charge of international operations at Sberbank, told SETimes that Sberbank plans to improve efficiency in the branches.

"The takeover of Volksbank is a good investment which provides potential for growth offered by central and east European markets in the medium and long run," Gorkov said.

Gorkov also said that an important part of the Sberbank's strategy for the region is its focus on small and medium enterprises.

"It is an underserved segment in central and Eastern Europe and therefore poses a growing banking opportunity where Volksbank is going to extend its presence under Sberbank's guidance, by providing the full spectrum of services from traditional banking to innovative non-banking services with the right speed and quality of service in the market," Gorkov said.

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"Currently, there are 58,000 small and medium enterprises in the bank's regional portfolio," Doris Ladewig, head of communication for Volksbank, told SETimes.

There are also 16,000 companies and more then half a million people in the portfolio as well, Ladewig added.

"They will have to work hard to convince citizens or businessmen to deposit their money or business to them," Sasha Cvetojevic, a Volksbank customer from Croatia, told SETimes.

Cvetojevic, who is also investor and member of the Croatian Network of Business Angels, said he prefers a strong, domestic bank as his main financing institution, but is content to have Volksbank as a second or third business partner.

This content was commissioned for SETimes.com.
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