President of Russia Dmitry Medvedev: How's work going, German Oskarovich? How are things at Sberbank? What have you accomplished? How would you appraise the situation, the prospects?
Chairman of The Board of Sberbank German Gref: In general at this point the situation is quite stable. Despite all the difficulties, particularly in the first quarter, we finished the first six months well in the black. Using Russian accounting standards, our profit was 66.6 billion rubles, that is net profit to the bank, and the bank's situation is absolutely stable: we are growing rapidly, despite the situation in world markets.
Dmitry Medvedev: Namely in international financial markets.
German Gref: Primarily, yes. The liquidity situation in international financial markets is very difficult, and this has of course had an impact on the entire financial sector. But all the fundamental indicators at Sberbank are very positive, and it is certainly the most well established bank in the country, and I think that even with the markets in a difficult situation our momentum is very good.
Our progress thus far is strictly in accord with the business plan that we approved at the beginning of the year. This year we hope to confirm that our strategy is a good one, and within five years we want to be among the ten largest financial institutions in the world. In this sense, the crisis has inhibited our development somewhat but, on the other hand, it has provided us with some new opportunities, and we are now actively using these opportunities to expand abroad. We are very actively moving forward in those countries where we have acquired bank assets.
In a sense, the situations in Kazakhstan and Ukraine are helping business rapidly develop in these countries, and we are actively looking to enter markets first and foremost in the CIS countries and, in the longer term, those of eastern Europe and Asia. But within five years we will have taken the first steps in this direction. Even after the [implementation of] our five-year strategy we intend to expand our presence in markets further afield. Thus our sense is that, despite the volatility in today's markets, the fundamental indicators that measure the macroeconomic performance of Russian companies is such that, once the current decline in share prices stops, there will be a so-called rebound and we think that the stock market should begin to improve again.
Dmitry Medvedev: Well, I know you have been busy with this, and in general we are all preoccupied with the Russian stock market these days. It is now one of the most attractive in the world. This is precisely because of what you said, the international financial crisis and certain problems with liquidity. Therefore, of course we will continue to develop the stock market in our country. It is everyone's responsibility: the President has to deal with it, as does the state as a whole by issuing the relevant regulations. The government cabinet has to concern itself with the stock market, implement the relevant decisions and regulations and exercise the appropriate supervision. Finally, public companies must deal with the market themselves, as well as with their corporate alliances, and ensure that their activities are consistent with high corporate standards, and are transparent and open for the market, in order to avoid the manipulation of stock prices. If all this is done, we can be sure of a good result.
I believe that the prospects for our stock market are extremely favourable, and without any doubt the development of the stock market reflects the health of the entire financial market. And as you know, we have set ourselves the special challenge of turning Russia, and Moscow specifically, into one of the world's financial centres. And when we are engaged in the development of even one company, even if it is a large one such as Sberbank, we must always keep in mind the realisation of this goal, how to move toward this goal. So I think that your strategy should be fully in accord with the country's strategy in this regard.
What new things do you have on offer?
German Gref: Dmitry Anatolyevich, first I fully share your view of the prospects for the development of the Russian market. Now we are working with our consultants whom we've invited to formulate a five-year strategy for the bank. They have analysed international markets and the prospects of their development over the next five years. It is not just our assessment but the evaluation of independent consultants that in the next five years the Russian market will be among the three fastest growing in the world, and will compete for first place with China as far as growth is concerned. Probably after five years the growth rate will be slower, but in the next five years ours will be one of the most promising markets.
Dmitry Medvedev: And here is that volatility you were talking about – this is of course a special economic term — but it also means that there is great growth potential in our stock market. For us, this volatility is creating some difficulties at the moment, but ultimately it simply reflects the state of affairs in the market and the investors' assessment of it.