UPDATE 1-Russia's Sberbank to complete, sell developments

* 5 percent of all financed projects seized for debt

* Sberbank will attempt sale first, then finish construction

* State likely buyer of foreclosed assets

(Adds comments from bank's deputy CEO)

By Dmitry Sergeyev

NIZHNY NOVGOROD, Russia, Aug 27 (Reuters) - Sberbank SBER03.MM, Russia's largest bank and a major lender to property developers, will complete and sell real estate projects after foreclosure, the bank's deputy chief executive said on Thursday.

"We will complete and sell (the projects) to the highest bidder. Our aim is to return as much money as possible," Deputy Chief Executive Yevgeny Korolyov said on the sidelines of a banking conference.

"For now (the bank) hasn't foreclosed on many projects. I would say that less than 5 percent of the projects we financed have come into our hands."

His comments offered a rare insight into Sberbank's strategy for the real estate assets it has accumulated as non-performing loans rise.

For now, Russia's state lenders, the biggest creditors to the struggling real estate industry, have played their cards close to their chest, keeping seized assets off the market and preventing pressure on real estate prices.

"For example, we get (an uncompleted building) ... First we would try to sell it right away. The next option is to find a builder to finish it. We could even finance the remainder of construction," Korolyov said.

He added the government was the most likely buyer of distressed properties: "All the developers are chasing the state, and we are no different."

He declined to discuss specific foreclosures, though he said the bank had some ready-built apartments on its books. Russian media have reported the bank received a stake in a major commercial project, City of Capitals, an office complex in Moscow's new business district.

Korolyov said the bank had teamed up with the government of St Petersburg to create an auction house to sell off non-core assets, including via Internet sales. (Writing by Melissa Akin; Editing by David Holmes)