Sector: Financial sector
Sberbank is moving to draw a syndicated loan at LIBOR + 85 basis points, or at a below average interest rate. The bank’s position as a first-rate borrower should enable it to expand its business in Russia at a minimum cost.
Sberbank is in the process of drawing a USD one-billion three-year loan from a syndicate of twelve foreign banks. The loan carries an interest rate at LIBOR + 85 basis points.
We view the news as positive for the bank. Although the bank previously succeeded in attracting loans at even lower interest rates, we regard the interest charged on its latest loan as very attractive given the current liquidity crunch on world capital markets. The cost of the loan will be lower than the cost of the bank’s liabilities in 2007, borrowed at an average interest rate of 4.72%. The loan will enable Sberbank, the largest Russian bank, to finance its expansion and boost its market share, given that domestic demand for banking loans is steadily on the rise.
We estimate the target price of one common share in Sberbank at USD 5.26 as of year-end 2009, with an upside potential of 115%, which corresponds to a BUY recommendation. The target price for one pref is USD 3.15, with an upside of 128%, which likewise corresponds to a BUY recommendation. Konstantin Romanov
Other comments of the day
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Sberbank
Capitalization: $18 708 905 800,00
Common shares:
Price: $0,85
Target price: $3,31
Recommendation: Buy
Delta week: -9,6%
Delta month: -19,2%
Delta year: -80,1%
Preferred shares:
Price: $0,36
Target price: $1,17
Recommendation: Buy
Delta week: -9,1%
Delta month: -23,7%
Delta year: -87,9%
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0.569
0.073
