Markets News

UPDATE 2-Sberbank bets on e-commerce in expansion beyond banking

* Sberbank eyes higher profits from non-financial businesses

* Says no plans for large M&A in e-commerce

* To hold controlling stake in non-financial ventures for now

* Will channel 50% of net profit on dividends in next 3 years (Adds detail, bullet points)

MOSCOW, Nov 30 (Reuters) - Russia’s largest lender Sberbank expects its non-financial businesses to generate 60% of company revenues by 2030, with e-commerce at the heart of a new three-year strategy unveiled by Chief Executive German Gref on Monday.

In a shift away from its core banking business, Sberbank wants to become one of Russia’s top three e-commerce players by 2023 and is taking a majority stake in online platform SberMarket, a joint venture with internet group Mail.Ru , it said.

Sberbank has invested some $2 billion in acquisitions and IT as it attempts to join Apple and Google on the big tech stage. It also has the Rambler media group and Okko online cinema among other assets.

Over the next three years, revenue from Sberbank’s non-banking businesses should reach at least 5% of the group total, said Lev Khasis, first deputy chairman of the bank’s executive board, during its online investor day.

“We will make substantial investments of around 4% of our capital to implement this strategy,” he said. “We will direct most of that on developing the e-commerce business.”

Khasis said Sberbank’s total investment in SberMarket now stands at 12 billion roubles ($156 million). He said its growth in the sector would likely be organic and that while partnerships were possible, large mergers and acquisitions were not.

Russia’s e-commerce market has boomed this year as consumers switched to online shopping during coronavirus lockdowns.

Gref said Sberbank was planning to monetise its non-financial businesses by carrying out initial public offerings, but said the lender had no plans to sell controlling stakes in those ventures by end-2023.

Despite the change in focus, the banking business will still account for approximately 70% of net operating income by 2023, forecasts presented by Gref showed.

The bank’s return-on-equity, a key measure of profitability, is forecast at over 17% in 2020-2023.

Retail lending is set to grow by 10-12% a year and Sberbank’s corporate portfolio by another 5-7% annually in 2020-2023, the presentation said.

Sberbank said it was also planning to channel 50% of net profit to dividends in the next three years. ($1 = 76.1660 roubles) (Reporting by Andrey Ostroukh, Alexander Marrow and Tatiana Voronova; Writing by Alexander Marrow; Editing by Katya Golubkova, Jane Merriman and Jan Harvey)