The CEO and chairman of the executive board of Sberbank, Herman Gref, has said it has preserved its business priorities in Turkey and will gladly continue to support infrastructure projects in the country.
Sberbank, Russia’s biggest by assets, bought its Turkish unit DenizBank in 2012 for around $3.5 billion -- the Russian bank’s largest overseas acquisition to date.
In an assessment of current trade relations between Turkey and Russia and the state of the Turkish banking sector, Gref answered a number of questions:
Question: Were the results of DenizBank in first half of 2017 announced? How did you assess these results?
HG: I can assess these results as brilliant.
Q: Sberbank has been operating in the Turkish market for five years. What is the place of DenizBank within the Sberbank group? What prospects for future cooperation do you see?
HG: DenizBank is the main asset among all our foreign assets. And this asset is in one of the most important countries for Russia -- Turkey.
This highlights the importance of DenizBank.
In five years, DenizBank grew four times. Moreover, this growth took place during a difficult period for Turkey.
Looking ahead, Sberbank sees good prospects for the development of the Turkish economy.
We expect future growth of the Turkish economy at the level of 3-4 percent per year.
We see very good prospects in terms of developing our business in the Turkish market. The Sberbank Group will further expand its product range. This will also be the case for cross-border products that link Russia and Turkey.
We will continue to expand the scope of transactions on the basis of the Turkish lira and ruble. We feel comfortable here, and Sberbank sees Turkey as its ‘second motherland’.
Q: In both countries, various construction and infrastructure projects continue. What is the amount of support provided by your group to these projects? Are you planning to continue supporting megaprojects in Turkey?
HG: Today in Turkey, the Sberbank group is number one in sectors such as agriculture and tourism. Besides this, we are among the leading banks in such sectors as infrastructure, healthcare, banking for pensioners and SME banking. We could continue listing all the projects for a very long time.
Even if you look out the window, you can see projects supported by us; for example, the third bridge across the Bosphorus (in Istanbul, the Yavuz Sultan Selim Bridge). Sberbank also takes part in airport construction projects. Over the past 17 years, 55 airports were built in Turkey, and we participated in one third of these projects. Sberbank keeps these priorities and will gladly continue to support infrastructure projects, as we know that Turkey has very ambitious plans in this area.
Q: How would you assess the results of the Turkish economy and the Turkish banking sector in the first half of this year?
HG: The Turkish economy today is in pretty good shape. If we look back, we can observe good growth in all indicators. Over the past 17 years, the gap between the poorest 10 percent and the richest 10 percent of the population has significantly narrowed. Not many countries achieve such results. In this sense, success of the AK Party is obvious.
In addition to airport construction projects, it is also necessary to mention highway construction and high-speed train line projects. In Sberbank, we feel confidence in terms of stability of the national currency in the future.
The current account deficit in 2000 was four percent, today it is 4.6 percent. This is a good indicator.
Of course, you can never be sure of everything -- sometimes you may face unpredictable challenges. However, we do not see any problems in the Turkish economy for the next 3-5 years. Consequently, this is the right time for further developing our business here.
Q: As of today, transactions on the basis of the ruble and the Turkish lira have started on the futures exchange. Do you think that this fact can contribute to the expansion of usage of national currencies in relations between Russia and Turkey? What do you think about the usage of national currencies in trade relations between the two countries?
HG: We are now developing a road map. Once it is developed, the road map will be submitted for consideration of the regulatory authorities of the two countries. Next year, we will try to conduct operations on the basis of the ruble and Turkish lira.
This is mainly important for millions of Russian tourists who come to Turkey, and a very large number of entrepreneurs who earn money in Turkish liras and spend it in rubles. Of course, it will be necessary to have an agreement on swap transactions between the central banks of the two countries. And Sberbank continues to work on this issue.
Q: Russia and Turkey have made a very important step. High-level relationships between the two countries are registering steady progress. What is Sberbank’s strategy in terms of expanding trade relations between Russia and Turkey?
HG: All that we have done until now is aimed at strengthening bilateral relations. We are establishing a payment system infrastructure for our customers in both countries and providing financial support for different projects.
In the largest cities of Russia, Sberbank has established special units, so-called ‘Turkish Desks’. Turkish-speaking bank employees work in these units and provide support in different issues to Turkish entrepreneurs working in Russia.
In addition, as I have already mentioned, we will continue developing trading operations on the basis of the ruble and Turkish lira.
Of course, it will not be good news for international payment systems, as Sberbank will deprive them of interest payments they charge to customers. However, this project will provide important benefits for people, since FX transactions will become cheaper and faster. Today, all transactions are carried out via U.S. dollars. I hope that all these will become a thing of the past.
Major infrastructure projects, cultural projects that we support between the two countries -- all these will give us an opportunity to build a strong future in Russia, Turkey and Europe. This future should be established on the principles of mutual trust and respect. We call it the MTR principle.
Only on this basis we can build a strong future. Therefore, we are trying to invest in it. Here in Sberbank, we believe in it. Russia and Turkey will always remain neighbors. Therefore, we are destined for good cooperation that will provide great benefits for us all.