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Financials

Sberbank CEO to expand 'ecosystem' for life beyond banking

* Sberbank has spent $2 bln on non-banking businesses

* Aims for around 60% revenue from non-core areas by 2030

* Russian central bank plans rules for business ‘ecosystems’

* CEO sees no alternative to ecosystem as core margins fall

* Full Gref quotes in Russian

MOSCOW, March 3 (Reuters) - Sberbank, Russia’s biggest bank, has no choice but to diversify into non-banking businesses as shrinking margins threaten the very survival of traditional banks, Chief Executive German Gref told Reuters.

Russia’s central bank is drafting regulations to govern so-called ecosystems, a term used in the country to describe businesses which stretch beyond a bank’s core function and aim to provide a single window for services to its clients.

Sberbank, which has $448 billion in assets, has so far spent around $2 billion, or 3% of its capital, on expanding into non-core businesses which range from cyber security to online cinema and food delivery.

With Sberbank aiming for this to account for 60% of its revenue in a decade, the central bank is drafting rules to shield depositors from potential risks.

“Sber does not have another alternative than to build an ecosystem as banking margin is declining. Sber has a relatively small ecosystem comparing to our banking business, and we don’t see any risks for now,” Gref said during an interview in his office in Moscow.

Sberbank and the central bank are in active discussions about the proposed new regulation but there are no specific proposals yet, said Gref, who worked with the central bank governor Elvira Nabiullina in the economy ministry in 2000s.

SberCloud, a cloud-type platform, was one of the growth areas where Sberbank would compete with the likes of Mail.Ru and Yandex. “Only 7% of Russian companies are cloud-based... This market will boom in the next 10 years,” Gref said.

Sberbank, which saw the finance ministry replacing the central bank as its key shareholder last year, plans to provide more details about its ecosystem push after calls from the ministry and some minority shareholders, he added.

While Russia’s e-commerce market is underpenetrated compared to China and the United States, everything from food delivery to online shopping and cinemas has boomed during the COVID-19 and this shift is expected to accelerate further.

“We want to benefit from our presence in the fast-growing areas and this would be strange not to offer such a chance to our shareholders,” Gref said. ($1 = 73.6700 roubles) (Reporting by Tatiana Voronova and Katya Golubkova; Editing by Alexander Smith)

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