May 23, 2018 / 11:07 AM / 5 months ago

UPDATE 1-Sberbank scales back overseas expansion because of sanctions- CEO

(Adds quotes, detail)

MOSCOW, May 23 (Reuters) - Sberbank plans to scale down its international business operations further after agreeing a deal to sell its Turkish subsidiary Denizbank, the CEO of Russia’s largest bank said on Wednesday.

Sberbank is to sell Denizbank, the fifth-largest private bank in Turkey, to Dubai’s biggest lender Emirates NBD earlier this week as part of plans to shed overseas businesses to focus on its domestic market.

“We would have never left this business if not for the sanction regime,” German Gref said in an interview with state TV channel Rossiya24.

“We have steered Denizbank out from the American sanctions but European sanctions remain in place,” Gref said.

Sberbank is affected by Western sanctions on Russia over the Ukraine crisis although Denizbank had gained an exemption from broader U.S. sanctions on the Russian financial industry.

Gref said state-owned Sberbank expects to get $3.4 billion when the sale is completed, which is likely to happen either at the end of the third quarter or in the fourth quarter.

When asked if Sberbank, which was also put on the latest financial sanctions list by the West, was winding down its plans to expand internationally, Gref replied “Unfortunately, yes.”

Gref said Sberbank was now planning to focus on developing its business in neighbouring Belarus and Kazakhstan, while scaling down its presence in Europe.

Besides its Turkish business, Sberbank has a network of eight subsidiary banks in central and eastern Europe

Gref also said Sberbank was planning to gradually increase dividend payouts after channelling more than 36 percent of net profit on 2017 dividends. (Reporting by Andrey Ostroukh. Editing by Jane Merriman)

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