OREANDA-NEWS. October 29, 2012. Sergey Gorkov, Sberbank’s Deputy Chairman of the Management Board, discusses the bank’s plans on structuring their international business with Kommersant

- How will Sberbank’s international acquisitions be integrated? Will the businesses be unified?

The control system assumes that the management will be carried out from Moscow, but there will be headquarters in both Europe and Turkey. We are not talking about complete integration – there will be no organizational unity. Turkey is a separate and very dynamic market, and Denizbank is a significant asset, while VBI is smaller in scale

- What will the synergies entail?

Denizbank has excellent SME technologies and an established model for working with SME businesses, especially in agriculture. It is an extensive system, which involves a system of personal corporate managers and corporate cards. Also, Denizbank is strong in terms of IT. We would like to extend the experience we have at Denizbank over to VBI. By acquiring Denizbank not only did we purchase the bank but the new technologies as well, which we are planning to integrate with both our subsidiaries and Sberbank itself.

- What made you keep the Denizbank brand in Turkey?

The Denizbank brand is very strong and is 3rd in Turkey with regards to bank brand awareness, it has also has been around for over 80 years. We did purchase the rights for the Denizbank brand and can use it indefinitely; therefore, we decided that our Turkish bank will keep the name of Denizbank.

- In case with VBI when will you start the process of rebranding?

- Early next year.

- Are you satisfied with VBI purchase? The bank is still unprofitable.

- Given the current situation in Europe we expected it generate losses in the beginning. But we have experience of transforming banks from breaking even - in Kazakhstan and Ukraine. We expect that in the next year VBI will break even, although this clearly depends on the situation on the European market.

- How do you plan to withdraw VBI from losses?

- We have formed a new team, we expanded the Board (earlier there were only three members in the Board of VBI), and appointed a number of new people to be responsible for IT, risk, strategy andvarious different business lines. We have new management in Hungary and Slovakia while in the near future there will be a change in Serbia. In addition, we are forming a new business model for VBI. Up untill now VBI was built on two branches: SME and loans to purchase real estate. We are actively adding corporate business, expanding retail changing the approach to SME. We want to see the balance between these segments eventually at around 30% each In retail, we will actively introduce our own scoring technology - credit factory. Already in December, this will begin working in the Czech Republic, and in early 2013 - in Slovakia.

- Will you change the business of the Turkish bank?

- We don’t plan such a significant changes in Turkey, the focus in the Turkey will remain on the segment of SME.

- Together with Denizbank you have received a bank with the same name in Russia, what do you intend to do with it?

- Turkish companies are active in Russia, and so with Denizbank we probably look into a service where Turkish companies could get a full range of group services

- What are your plans for the expansion to the other European markets such as Poland?

- We were interested in Poland, but decided not to go there. We are now present in Germany through Denizbank (there is a representative office and a corporate business, the bank attracts deposits), and we are more likely to develop business there than to go to Poland. Tthe German market itself is interesting for us.

- You have business in the Asian markets – in China and India, how are these assets developing?

- There is a Sberbank representative office in China. It is a closed market, though it is very important for us, that is why we are still accessing the market. There is a proper Sberbank branch in India. Since the start of the year we have started to provide loans and have already lent several million dollars. Our strategy there involves gradual organic growth in the corporate segment and entering the retail area through payroll projects. By 2014, the Indian subsidiary is to become profitable.

- How did the latest acquisitions change the scale of the international business of Sberbank?

- There has been a huge leap: three years ago our foreign assets were less than USD 1 billion, now – more than USD 50 billion.