MOSCOW, March 10 (Reuters) - Russia’s Sovcombank has no immediate plans for an IPO and doesn’t intend to bring forward a 2024 deadline, despite a pick up in new issues, as investor sentiment towards the banking sector remains mixed, co-owner Sergei Khotimsky told Reuters.
Sovcombank’s plans are in focus amid a pick-up in Russian initial public offerings (IPO), with retailer Fix Price raising $2 billion in an IPO last week.
Russia’s third largest private bank hired banks last year to prepare for the deal, sources familiar with the matter said.
However, Khotimsky said the timing of the IPO would depend on how investors assess the bank’s efforts to deal with non-performing loans (NPLs) in 2021.
The cost of risk rose markedly last year as some borrowers struggled to make repayments in the coronavirus pandemic, but it has begun to stabilise.
Sovcombank’s NPLs stood at 4.9% of its retail portfolio and 0.6% of its corporate book at the end of 2020.
“We have flexibility to select the optimal time for an IPO,” Khotimsky said, stressing the bank did not need an IPO to raise funds.
“We currently have no shareholders who would like to sell their stake. We pay dividends, but we channel most of our profits to Sovcombank’s equity.”
Khotimsky said an IPO was only a question of time, however.
“Sooner or later we will have to become public because managing a company with such a high number of shareholders is difficult on an operational level,” he said, referring to some 40 individual and legal entities among the bank’s shareholders.
Sovcombank is co-owned by a number of Russian businessmen, including Khotimsky and his brother Dmitry. The sovereign wealth funds of Russia, China, Saudi Arabia, Japan and Qatar hold minority stakes.
Sovcombank, which in recent years has participated in most merger and acquisition transactions on the Russian financial market, plans to increase lending in 2021.
“We are hoping to grow by 20% in the retail sector and 20-25% in the corporate sector in 2021,” Khotimsky said. (Reporting by Tatiana Voronova and Andrey Ostroukh; Editing by Gabrielle Tétrault-Farber and Mark Potter)