Sberbank - Annual Report 2010 - Development

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# Development of the Branch and Subsidiary Network Abroad

In line with the Development Strategy through 2014, Sberbank is set to develop its business in the CIS and to look for expansion opportunities outside the CIS. At 1 January 2011, Sberbank operated outside Russia through a branch office in India, two representative offices in Germany and China and three subsidiary banks located in Kazakhstan, Ukraine and Belarus.

### A branch office in India

In autumn 2010, Sberbank registered a branch office in India (New Delhi). The branch office was established as a strategic platform for the development of Sberbank’s business and will be primarily engaged in handling foreign trade settlement flows between India and Russia and other CIS states in which Sberbank conducts its business.

### A representative office in Germany

The key objective of the representative office is to strategically position Sberbank with European business circles. In 2010, the representative office took an active part in the Munich Security Conference, the 20th Frankfurt European Banking Congress, and SIBOS 2010. The representative office provided support in arranging and holding multi-lateral negotiations with a consortium of German banks in order to finance exports of capital-intensive goods and services to Russia under the guarantee of export credit agencies.

### A representative office in China

In June 2010, Sberbank obtained approval from the China Banking Regulatory Commission to open a representative office in Beijing. The representative office was registered in the People’s Republic of China in the third quarter of 2010 in accordance with local laws, and will become fully operative from 2011. The representative office is set to develop relations with local banking, commercial and government structures in order to promote the business of the Bank and its clients in the region.

### JSC BPS-Bank (Republic of Belarus)

In 2010, JSC BPS-Bank was ranked among the top-three players on the national banking market and significantly expanded its presence in all key market segments. JSC BPS-Bank services more than 27,000 legal entities and around 1.5m individual clients, and is involved in 30 government lending programmes.

The subsidiary’s asset value according to IFRS grew by 80.9% during 2010, totalling BYR 807bn, while net profits increased by 9.3% to BYR 114.7bn.

The year 2010 saw the completion of key initiatives towards the integration of JSC BPS-Bank into the Sberbank Group, including the institution of the new executive management bodies, establishment of control over the management bodies, approval of the subsidiary’s mid-term development strategy and the introduction of the new organisational structure. These initiatives provide Sberbank with the required decision-making leverage to manage the operations of its subsidiary.

Sberbank increased its shareholding in JSC-BPS Bank to 97.91%, following the offer to purchase JSC-BPS Bank’s shares and injecting additional capital in excess of RUB 960m.

### SB JSC Sberbank (Republic of Kazakhstan)

According to the local ratings of the major banks at 1 January 2011, SB JSC Sberbank is ranked seventh by equity, seventh by profit and ninth by total assets.

In 2010, SB JSC Sberbank’s assets according to IFRS grew by 29.0% due to an increase in corporate lending operations and growing investments in securities. An influx of funds deposited by customers contributed to the liabilities growth. The subsidiary bank’s net profits for 2010 totalled KZT 2.6bn.

Supported by Sberbank, the subsidiary bank has put in place a unified tariff system aimed at expanding its customer base. The system provides for a significant reduction in cash withdrawal fees for the subsidiary bank’s cardholders using Sberbank’s ATMs in Russia.

The subsidiary bank’s Development Strategy up to 2015 was approved by its board of directors in 2010.

### JSC Sberbank of Russia (Ukraine)

JSC Sberbank of Russia strengthened its position in the local market in 2010. The subsidiary bank’s assets according to IFRS grew by 73.4% to UAH 10.2bn, primarily due to an improved corporate lending business. The year 2010 saw the first lending transactions with major Ukrainian companies that were completed jointly by the parent and the subsidiary bank. The growth in liabilities was primarily driven by an increase in corporate and retail deposit balances.

The subsidiary bank’s net profits for 2010 totalled UAH 136.9m.

In March 2010, Sberbank acquired additional shares issued by JSC Sberbank of Russia for an amount equivalent to USD 186m in order to support the subsidiary bank’s financial stability.

- Branch Network in Russia
- Development of the Branch and Subsidiary Network Abroad

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