DAVOS-Russia Sberbank CEO calls for state banks sale

* Sberbank CEO says state should sell stakes to plug deficit

* State can "easily" cut stake to 50 pct plus one share

* Fin Min says markets not recovered yet after crisis

* Fin Min says to sell stake in VTB before Sberbank

(Adds VTB's Kostin comments, details)

By Gleb Bryanski

DAVOS, Switzerland, Jan 28 (Reuters) - The head of Russia's largest lender Sberbank SBER03.MM called on Thursday for a privatisation of Russian state-controlled banks, but Finance Minister Alexei Kudrin said markets were not ready yet.

Sberbank, controlled by the central bank, and rival VTB (VTBR.MM), which is controlled by the government, together own about one third of the banking sector assets in Russia. Both banks were severely hit by the economic crisis.

Kudrin, who sits on the board of both banks, said VTB was more likely to feature in any sell-off before Sberbank, which is a home to roughly a half of the country's retail deposits.

Russia plans to raise about $2.5 billion from privatisations this year, although officials have signalled that investors interested in state-controlled heavyweights -- including Sberbank -- will have to wait beyond 2010. [ID:nGEE5AN2R8].

However, Sberbank CEO German Gref said that privatising his bank could be a good way to help reduce a budget deficit left by Russia's first recession in a decade.

"We need to privatise state banks and let's start with Sberbank," Gref said at the World Economic Forum in Davos.

Kudrin said he supported banking sector privatisation but now was not the right moment to sell.

"I am also waiting for the moment when we start to sell banks...The market has not yet recovered after the crisis, for now it is too soon. We will wait," Kudrin said at the forum in Switzerland.

The state could easily reduce its stake in Russia's most trusted bank to 50 percent plus one share from 57.6 percent now, and still comply with current legislation, Gref said.

Russian law says the state should hold a controlling stake in Sberbank but Gref suggested there be a parliamentary debate on the issue.

"The very high capitalisation of Sberbank allows the sale of the stake on attractive terms," Gref said.

Sberbank's market capitalisation stood at $64 billion as of Wednesday's close, valuing the state's total stake at around $37 billion and a 7.6 percent stake at $4.86 billion.

VTB FIRST?

The other potentially lucrative asset the state can sell is the part of the government's stake in VTB (VTBR.MM), Russia's second biggest lender.

The government injected 180 billion roubles in VTB's capital last September and increased its share in the bank by around 8 percent to 85.5 percent. Shares in VTB have risen more than 50 pct since September.

"With VTB, we will go earlier than with Sberbank. With Sberbank, we have a more conservative plan because of its social importance," Kudrin said, adding that Russia needed both banks to boost lending to the "real economy".

Kudrin said proposals to break up large banks in developed countries could not yet be applied to Russia and said the focus should instead be on improving banking regulation.

VTB CEO Andrei Kostin said privatising the bank in 2010 would be difficult but the bank could reach an agreement with the government this year on technical aspects of any sale.

Russia posted a budget deficit of 2.3 trillion roubles in 2009 as the government kept spending high to help the economy out of recession, even as tax revenues fell.

For this year the deficit is planned at 2.9 trillion roubles ($95.61 billion), although officials say it could be less.

"The state has accumulated a lot of assets and they need to be privatised. Without that, the task of reducing the budget deficit will not be achievable," Gref said. (Writing by Dmitry Sergeyev and Gleb Bryanski; Editing by Jon Boyle)