Russia’s Sberbank will send $3.6bn to state coffers this spring as part of a record dividend payout, even as its profits fell due to Western sanctions imposed last year over Moscow’s invasion of Ukraine.
This is marked as a record in terms of share of profit paid out. In previous years, the bank distributed only 40-56 per cent of its profits to shareholders, while Friday’s recommendation was for around 200 per cent of the bank’s 2022 net profit of Rbs270.5bn.
Although the sanctions cut profits last year, down 80 percent in 2022 compared to 2021, Sberbank still appeared to be in a position to make the big payout due to the “sustainability of the business,” Chief Executive Hermann Graf said in a statement.
Greif, a longtime economic confidant of President Vladimir Putin, added: “Our dividend is not only additional financial income for each private shareholder, of which we have 1.5 million, but also a significant contribution to the entire state budget.”
Russia’s budget deficit has widened due to rising defense spending and the impact of sanctions on the country’s oil and gas revenues.
The payments to the state are “a significant amount of money that will add an additional 1 percent of expected budget revenues this year,” said Sofia Donets, chief economist at Renaissance Capital.
That was close to the Rbs300bn the Russian government hoped to raise with a 5 per cent windfall tax set to cap the “exorbitant profits” of its core businesses, Donets noted.
Greif told friends he opposed the war and last year made a presentation to the Russian president a month before the invasion warning of the devastating economic consequences.
But like all but a handful of officials and heads of state companies, the banker has chosen to stay in his post, insisting privately that he has a responsibility to Sberbank’s customers and rejecting accusations that the bank is helping to fuel the Russian war machine. , people who know him say.
Sberbank’s payout was made possible by its record net profit in 2021, which it did not distribute as a dividend last spring, on the recommendation of the central bank. At the time, authorities were scrambling to maintain the country’s financial stability in the wake of Western sanctions.
“Compared to 2021, Sberbank results for 2022 were weak. But the bank exercised its right to pay dividends from its retained earnings,” said Timur Nigmatulin, an analyst at Russian investment company Finam. “If you have the money, why not pay?” He added, citing the bank’s high capital adequacy.
Sberbank’s quasi-monopoly status — it holds about half of Russian retail deposits, while about one in three people bank there — has also helped keep the bank strong.
Its 2022 net profit was higher than that of the banking sector, which made Rbs200bn as a whole as other lenders posted heavy losses.
In response to the dividend announcement, Sberbank shares rose 10 percent on Russia’s main stock exchange MOEX, down 40 percent from their pre-war levels.
Additional reporting by Max Seddon in Tel Aviv
