Russia's Sberbank to auction collateral assets

ST PETERSBURG, Sept 3 (Reuters) - Sberbank SBER03.MM, Russia's biggest lender, hopes to recoup losses on bad loans by selling hundreds of millions of dollars of collaterals via a new auction house, the adviser to the bank's chief executive said. State-controlled Sberbank, which holds around 25 percent of the country's banking assets, is struggling with losses as the share of bad loans within its portfolio rose to 3.2 percent in July and provisions effectively consume all profits.

"We will sell the real estate assets, the apartments pledged for loans, except for mortgaged ones, office buildings and the other property of the bank's debtors," Nikolai Andreyev, adviser to Sberbank CEO German Gref, told reporters on Thursday.

The bank teamed up with the government of St Petersburg to create an auction house, in which Sberbank has a share of 33 percent, to sell off non-core assets -- a potentially attractive trading platform for Russian banks overloaded with seized collateral assets that include everything from greenhouses to cattle farms.

"VTB and Bank of St Petersburg already contacted us and we are ready to integrate them. We plan to open the platform in Moscow in the next six months," Andrei Stepanenko, a director general of St. Petersburg's City Property Fund, told a press conference.

Analysts say the state, whose banks hold the lion's share of potentially lucrative industrial assets as security, could parlay the collateral into huge profits if they stick with the right strategy.

The auction house will also sell art, jewelry, shares in private companies and antiques, the Fund said in a press release.

(Reporting by Denis Pinchuk, writing by Dmitry Sergeyev; editing by John Stonestreet)