WHILE PROFITS SOAR, SBERBANK HALTS FOREIGN INVESTMENTS
By Kim Iskyan
Russian state savings bank Sberbank posted a 74% jump in third-quarter profits in late November on the back of sharp growth in lending.
Putin gets poor response in parliamentary electionsPhoto Credit: Martynova Anna / Shutterstock.com
Following the third-quarter profits statement, the bank said that it would postpone plans to acquire assets in Turkey and Poland. Sberbank over the summer finalized the purchase of Eastern European lender VBI and is in the process of integrating the acquisition of Russian brokerage and asset manager Troika Dialog.
Prime minister Vladimir Putin’s United Russia party posted a surprisingly poor performance in parliamentary elections in early December, garnering just over 49% of the popular vote, compared with 64% in elections four years ago. The Communist party, which received 19% of the vote, and the nationalist Liberal Democrats were the key beneficiaries of the flight from United Russia.
The results represent the biggest electoral rebuke for Putin since he rose to power in 1999—reflecting growing public disenchantment with his regime. Under Putin there is an increased chance of nationalistic economic policies that could run counter to the interests of foreign investors. The 2012 federal budget calls for continued growth in social welfare and defense spending. Even with high oil price assumptions, the plan projects a modest deficit—which could widen substantially given weak commodities prices.