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However, as the Central Bank of Russia (CBR) has continually cut rates the interest rates in banks have fallen. The CBR cut rates to 4.25% at its last meeting in October – the lowest level it has been since the fall of the Soviet Union – dragging bank deposit rates down with it.
Some 20% of local retail investments were held in FX bonds, 18% in Russian equities, 13% in and foreign currency, 19% in corporate and bank ruble bonds, and 7% in foreign equities. The remainder (23%) was split among structured obligations, OFZs, mutual funds and ETFs, Sberbank CIB reports.
“Russians have been withdrawing cash during the pandemic, but this flow is likely to reverse next year. Russians withdrew just under RUB1 trillion in cash in 2Q20, which owed in large part to fears that their access to ATMs would be curtailed under lockdown measures. In 3Q20, they withdrew RUB368bn, which is still a significant amount,” the bank said in a note.
“This has had a negative impact on liquidity in the banking system and caused bank demand for refinancing to increase. However, we see all of this as temporary and expect cash to gradually flow back into the system next year,” the bank added.
2.7 Sberbank buys 20% stake in Mail.ru
In the latest shakeup to Russia’s tech sector, Sberbank confirmed on November 17 that it is in negotiations to buy a 20% voting stake in Mail.ru Group. This will make Sberbank the second largest voting shareholder in the company, following Megafon owned by oligarch Alisher Usmanov.
According to reports, Sberbank will acquire the voting stake by purchasing Gazprombank’s 35% stake in MF Technologies, an IT holding company that controls 58.9% of Mail.ru’s voting shares. This will indirectly grant Sberbank 20.6% of Mail.ru’s voting shares. The transaction will reportedly cost $170mn, not much more than the $157.5mn that Gazprombank paid for the shares in 2018.
Sberbank and Mail.ru Group have announced plans to create a joint venture that will become the leading Russian platform for online-to-offline services in food and transport. Mail.ru will contribute its food delivery service, Delivery Club, and its taxi service, Citimobil (a 22.69% stake) to the JV. Sberbank will offer its share in Foodplex (35%), and provide funds for JV’s development.
The news does not come as a complete shock given the recent uptick in Sberbank’s joint business activity with Mail.ru (the companies created a taxi and food delivery joint venture in July) and the Kremlin’s latest initiative to limit foreign ownership in Russia’s IT giants. Yet the Russian media tells an interesting story about how Sberbank set its sights on Mail.ru.
According to The Bell, Sberbank CEO German Gref’s decision to purchase a sizeable share in Mail.ru stems from his failure to acquire Yandex last fall. In recent years, Gref has made it his goal to transform Sberbank into an IT giant that touches every aspect of Russians’ lives. As codified in Sberbank’s 2017
14 RUSSIA Country Report December 2020 www.intellinews.com
