Trading the Globe: meet Eastern Europe’s best bank


Shutterstock photo

Sberbank is the best bank in Eastern Europe, and it only started ramping up on Wall Street yesterday. We talk about it on today's installment of Trading the Globe. As of yesterday, Sberbank is moving from SBRBF to SBRCY ( quote ) ahead of a more formal sponsored Level 2 GDR listing in London in September: The September listing will also free up 7.6% of the state's Sberbank shares for other investors to get a taste of this company -- for many, especially in the U.S. retail channel, it will represent their first chance to buy this or any other Russian bank. While liquidity will not be terribly strong for awhile, it will definitely be better than it was previously. So far, about 1 million shares of SBRCY have moved every day. In all, 25% of the free float will move toward the foreign shares, which will be sufficient and will grow. Goldman Sachs is making the two-way market in SBRCY for 2 million shares, the equivalent of 8 million shares of the underlying Russian stock. And there will be automatic conversion from the German SBNA stock to the U.S. equivalent, which will help even further. There is no real reason why SBRCY should not trade like other Russian "pink sheet" names like Gazprom ( OGZPY , quote ), Lukoil ( LUKOY , quote ) and Norilsk Nickel ( NILSY , quote ), all of which are reasonably liquid. And this is a great company that many global players have been unable to own because to this point it only really traded in Russia. Valuation is solid and even cheap according to historical book value standards -- 1.6 times BV is at the low end of SBRCY's historic range. Loan activity is a robust 20% and ROE is in a 25% to 30% range. Furthermore, SBRCY also recently bought Troika Dialog, the largest domestic investment bank and asset manager. While Sberbank was already Russia's leading bank, this will be a driver of the modernization of the business.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Stocks: SBRBF , SBRCY

More from Emerging Money


Emerging Money

Emerging Money

Emerging Markets
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by