Sberbank to stress loan quality over credit growth
MOSCOW, Oct 3 (Reuters) - Russia's largest lender, state-controlled Sberbank (SBER03.MM), is no longer targeting lending growth and will concentrate instead on the quality of its loans, Kommersant business daily reported on Friday.
The move could bode ill for Russian companies which have around $120 billion to $200 billion of foreign debt to pay back by end-2009 and are hoping to find funding at home as the credit crunch has virtually closed off the possibility of borrowing abroad.
Kommersant quoted a letter from Sberbank CEO German Gref sent to employees this week, which represents a major shift in the business strategy of the banking major that accounts for a quarter of Russian banking sector assets.
"We have removed lending growth indicators from our business plan, instead prioritising the safety and the return guarantee of the credits which we have given out," the letter said.
Central bank first deputy chairman Alexei Ulyukayev said on Thursday that Russia's credit growth should be around 35-40 percent this year, down slightly from around 50 percent in 2007.
Sberbank's corporate credit portfolio grew around 20 percent in the year to Aug. 1, to 3.6 trillion roubles ($140.6 billion).
Earlier this week, Sberbank hiked interest rates for new retail loans by 0.25 to 2.25 percentage points in the first major trickle-down effect of the global financial turmoil on common Russian citizens [ID:nL197333].
With an unrivalled 20,000 branches spanning Russia's 11 time zones, Sberbank accounts for 32 percent of the retail lending market, holds money for half the population and in a recent survey was judged the second-safest investment after property.
It is also one of the three major banks authorities are relying on to resuscitate the inter-bank money market and provide liquidity to smaller financial institutions.
Sberbank had been expected to announce its new strategy this autumn. When Gref was appointed as Sberbank's chief last year, he said consumer credit was a priority, especially mortgages.
According to JP Morgan research, retail loans -- a relatively new phenomenon in Russia -- totalled around 10 percent of GDP at the start of 2008, and corporate loans 26 percent. (Reporting by Toni Vorobyova; Editing by Hans Peters)
