Securities transactions

Trading in securities

Sberbank’s securities portfolio decreased 10.8% to RUB 1,626 billion at year-end. Repayment of the bonds by the Bank of Russia for RUB 430 billion provided Sberbank with additional Ruble liquidity (these securities were acquired for liquidity management purposes). The Bank acquired other securities throughout the year, predominantly those included in the Bank of Russia’s Lombard List, which ease an access to additional liquidity should the need arise. The most noticeable increase was observed in corporate bonds.

To achieve a wider diversification of our securities portfolio, we continued to expand into new segments of the debt market, such as Eurobonds issued by sovereign borrowers in the CIS (including Rubledenominated bonds issued by the Republic of Belarus), Eurobonds issued by CIS-based corporate issuers and sovereign bonds issued by emerging market countries (Turkey and Brazil). Citigroup Funding Inc. and Barclays Bank PLC’s Ruble-denominated bonds were added to the Bank’s securities portfolio. At the end of 2011, Sberbank was the undisputed leader on the domestic bond market by the size of securities portfolio and one of the market leaders in terms of the volume of deals.

Sberbank received the 2011 REPO Market Dealer Award from the National Stock Exchange Association, the leading professional organisation of members of the Russian securities market, for its significant contribution to the development of the Russian stock market.

Brokerage services

Sberbank is successfully expanding its brokerage business. Starting in the first quarter of 2011, the Bank began providing brokerage services on the OTC market: eurobonds, depositary receipts, participatory interests in foreign mutual funds and other foreign securities are offered for trading to clients.

In the second quarter of 2011, the Bank launched brokerage services on FORTS, the RTS futures market. Futures contracts for shares, foreign currency rates, MosPrime rates and the RTS index are now available for clients. In October-November, Sberbank was ranked the best FORTS broker by number of new clients.

The third quarter saw the launch of the Unsecured Transaction Service on MICEX (margin trading), the major brokerage project of the year. In September, the service was expanded across Russia, with more than 670 points of sale where brokerage contracts are signed using an Internet trading service.

Thanks to the extensive product range that Sberbank was offering by the end of the year, the Bank is now well placed to compete with major brokers. The Bank’s client base grew 12% year-on-year, with the number of new internet-banking clients increasing 2.4 times to 28,300. The average monthly volume of brokerage deals, excluding repo transactions, was around RUB 55 billion, up 1.5 times year-onyear. The share of Internet client transactions increased from 52% to 81%.

In December 2011, Sberbank was awarded the Breakthrough of the Year Award for Outstanding Achievements in the Development of a Civilised Market of Qualified Investors in Russia. The award is bestowed for promoting and providing real substance to the concept of qualified investors. The award was founded by IMAC, a Russian consulting company that specialises in providing legal, financial and investment advice to domestic and foreign participants on the Russian financial markets.

Based on investment bank ratings published by Cbonds, Sberbank and Troika Dialog together were the top bond issue arranger on the Russian bond market in 2011

Underwriting services

In 2011, the Bank provided underwriting services following the integration of Troika Dialog, a Russian investment company. In 2011, Sberbank and Troika Dialog placed or assisted in placing 65 third-party bond issues worth close to RUB 200 billion at par. The share of Sberbank and Troika Dialog in total Ruble-denominated bond placements was 20%. Based on investment bank ratings published by Cbonds, Sberbank and Troika Dialog together were the top bond issue arranger on the Russian bond market in 2011.

Depository services

The Sberbank Depository continues to be one of Russia’s largest. The number of custody accounts increased 3.5% to 250,000. The market value of customer assets in custody grew 24% to exceed RUB 2 trillion.

In 2011, the Depository served as the underlying asset sub-custodian for the issue and clearance of depository receipts issued by JP Morgan Chase Bank N.A. for shares in major Russian companies. The Depository introduced an ADR programme for Rostelecom shares.

A programme of depository receipts issued by Bank of New York Mellon for Sberbank ordinary shares was introduced in 2011.

The Depository supported programmes for Russian depository receipts for UC RUSAL shares, including issuing and clearing depositary receipts and managing votes for the Russian market in connection with UC RUSAL shareholders’ meetings.

Jointly with JP Morgan, the Sberbank Depository transferred a programme to issue and clear depositary receipts for shares in Rosneft from JP Morgan Chase Bank N.A. to JP Morgan AG (Germany).

Based on client feedback on service quality, Global Custodian ranked the Sberbank Depository Domestic Commended as the domestic depository of choice.

Mutual funds

In 2011, the total volume of requests to purchase shares in mutual funds that we processed amounted to RUB 2.3 billion, up 7 times year on year. Such a rapid growth in the volume of mutual fund operations is attributable to the fact that we created the Sberbank Management Company at the end of 2010 which is now accounts for 80% of overall mutual fund investments raised by the Bank. Additionally, the number of agency desks that process requests more than doubled.


My Annual Report

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