Russia’s Sberbank recommends record dividend payout – CEO

FILE PHOTO: St. Petersburg International Economic Forum (SPIEF)

(Reuters) -The board of Russia’s largest lender, state-owned Sberbank, has recommended paying a dividend of 25 roubles ($0.3260) per share and a total payout of a record 565 billion roubles, CEO German Gref told reporters on Friday.

Sberbank’s Moscow-listed shares leapt around 7% on the day, outperforming the wider index and dragging it up to a near-seven-month high.

Sberbank, in common with other major Russian companies, did not pay a 2021 dividend last year, on the recommendation of the central bank and government.

Gref said the bank had opted against distributing dividends last year to give it a safety margin to overcome the effect of sweeping Western sanctions, which particularly targeted Russia’s financial sector.

But the bank wanted to thank shareholders for their trust, proposing its highest ever dividend payout, he said.

“I note that over the last five months, Sberbank’s shares have gained over 70%,” Gref said. “Those investors who believed in us in the most difficult period, from spring to autumn 2022, will receive the highest possible return on their investments.”

Sberbank expects profits to rebound sharply this year after a drop of nearly 80% in 2022 as sanctions rattled Russia’s financial sector.

The finance ministry last month said it expected Sberbank to pay out at least 50% of its 2022 profits in dividends.

Sberbank is also likely to contribute some profits to a one-off windfall tax that the government plans to levy to help cover its widening budget deficit. Gref has said the bank will comply.

The fixing date for dividends for ordinary and preferred shares is May 11, Gref said.

Sberbank, which boasts more than 100 million clients in its home market, has around 1.5 million Russians as private investors, Gref said.

“We consider today’s decision…an important event not just for our shareholders, but for the whole Russian stock market.”

($1 = 76.6900 roubles)

(Reporting by Alexander Marrow; Editing by Mark Trevelyan and Kevin Liffey)