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Sberbank strategy until 2020: reaching net profit of $17 bln, allocating 50% to dividends

December 14, 2017, 16:38 UTC+3 LONDON

The net profit of Sberbank under the International Financial Reporting Standards for the first 9 months of 2017 increased by 44% year-on-year

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© Sergei Savostyanov/TASS

LONDON, December 14. /TASS/. New strategy of Sberbank assumes achieving net profit of 1 trillion rubles ($17.06 bln) in 2020, Head of Sberbank Herman Gref said on Thursday.

"We undertake the commitment - around 1 trillion rubles ($17.06 bln) in terms of profitability in 2020," he said.

The net profit of Sberbank under the International Financial Reporting Standards (IFRS) for the first 9 months of 2017 increased by 44% year-on-year and amounted to 576.3 bln rubles ($9.82 bln).

Sberbank presented investors in London with a new three-year strategy. At the moment, the group is implementing a five-year strategy, calculated until 2018. The Supervisory Board of Sberbank approved the three-year strategy on December 12.

At the same time, Sberbank approved payment of dividends at the rate of 50% of net profit under the IFRS from 2020. "We will be able to pay dividends of 50% and higher early in 2020, if ... we deliver all our plans," Gref said.

The previous dividend policy of Sberbank provided for distributions at the level of 20% of the IFRS net profit. Sberbank allocated 135.5 bln rubles ($2.3 bln) or 25% of the IFRS net profit to dividends in 2016.

Gref said he does not believe in banks and thinks that any technology related company can learn how to grant banking services.

"I do not believe in banks. If you tell me that a bank should be built - it is not about me or our team. I think that banking will be one of the activities of a technology company and a modern bank," Gref said.

In his opinion, those "who knows needs of customers best, will quickly learn how to provide banking services."

"Because it's easier (for those companies - TASS) than for banks to learn all about technologies, predictions and visions of what the client wants to have at the next stage," Gref said. He added that this is the key point of Sberbank's team's vision.

In its strategy, Sberbank noted that the economic crisis has passed - there was growth of real GDP, and inflation slowed sharply and reached 2.7% thanks to the policy of the Bank of Russia. According to the strategy, the Russian economy has adapted to low oil prices and international sanctions.

Gref added that he expects inflation at around 2.5% in 2017, and around 4% within the next three years. "This year inflation will be roughly 2.5%. We expect inflation of around 4% within the next three years, or may be lower," he said Thursday.

As for Sberbank's international business, according to the bank's development strategy for 2018-2020, in the group's total revenue in 2020 it will reach 8%. "We expect that Russia will remain the main market for the group, more than 90% of the business. However, we expect revenue growth from our international business - in 2020, international business will provide 8% of the total income for the entire group," the document said.

The Strategy also touched upon the topic of cybercrime. Thus, Sberbank expects to reduce losses from cyberattacks to zero and eliminate failures in operations because of them by 2020.

According to its new strategy for 2018-2020, the bank expects 10-fold growth of the number of attempts to steal customer funds by 2020.

"The number of DDoS attacks will also grow. We undertake the task of maximizing the security of our customers' funds and data, as well as banking products and developments," the document said.

Earlier, Sberbank estimated the annual losses of the Russian economy from cybercrime at 600-650 bln rubles ($10.23 bln - $11.08 bln). Sberbank in 2016 deflected 74 cyber attacks on its systems.

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