BOFIT Viikkokatsaus / BOFIT Weekly Review 2020/09
About half of the shares of Sberbank, which is listed on the Moscow Stock Exchange, are currently held by the Central Bank of Russia. Given that the CBR is also in charge of banking supervision, the ownership arrangement has raised concerns. The government now proposes that the CBR sells its shares to the Ministry of Finance. This is no small move as Sberbank is the largest bank in Russia, controlling about 30 % of the total assets of the Russian banking sector.
The proposed legislation enabling the transfer of Sberbank’s ownership was submitted to the Duma on February 17. While bill readings have yet to be scheduled, passage seems certain. The new law authorises the finance ministry to acquire Sberbank shares now held by the CBR over next two years. Estimates for the potential sale price have been approximately 40 billion dollars. The finance ministry would pay for the share purchase with money from the National Welfare Fund, which already holds stakes in Russia’s other major banks (VTB, Rosselkhozbank and Gazprombank).
Proceeds from the sale will increase CBR profits, most of which are transferred to the state. Under the draft bill, the CBR will transfer the proceeds in instalments during 2020–2023. These revenues will increase non-oil revenues of the federal budget, i.e. they are not subject to the fiscal rule. Therefore, proceeds from the sale could be used to finance increased budget spending in the coming years.