WOOD Flash – Sberbank: shareholder structure – if it ain’t broke, don’t fix it
Albeit not imminent, we believe the speculated potential change in Sberbank’s shareholder structure could present some downside risk for Sber’s shareholders. Sber looks like a “CEO centric†organisation and it could be argued that the custodian does not matter, as long as Mr. Gref does not leave. However, the combination of the current ownership structure and management seems to have been working, and we would not be complacent about a controlling shareholder change in an institution of this size and importance. The news works against our BUY rating on the Sber commons. Our price target (PT) is RUB 286/share, and the stock trades at 6.1x P/E and 1.2x P/TBV for 2020E, on our estimates.Sberbank Russia is an open joint stock commercial bank. Co.'s principal business activity is corporate and retail banking. This includes, but is not limited to, deposit taking and commercial lending in freely convertible currencies, local currencies of countries where the subsidiary banks operate and in Russian Roubles, support of clients' export/import transactions, foreign exchange, securities trading, and trading in derivative financial instruments. Co.'s operations are conducted in both Russian and international markets. As of Dec 31 2014, Co. had total assets of RUB25.20 trillion.
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