Russia moves to open banks to foreign investors http://today.reuters.com/news/articlebusiness.aspx?type=bankingFinancial&storyID=nL15793515&imageid=&cap=
Fri Dec 15, 2006
By Dmitry Sergeyev
MOSCOW, Dec 15 (Reuters) - Russia's parliament on Friday backed legislation that would put domestic and foreign investors on an equal footing when buying shares in Russian banks.
The new law would oblige both residents and non-residents to inform regulators if they purchase more than a 1 percent stake in a Russian bank and seek permission to build a stake of more than 20 percent.
Under current law, foreigners must seek permission to buy any number of shares in a Russian bank and inform the regulator of the ultimate owner of banking shares, making it complicated for investors such as mutual funds to invest in Russian banks.
"This new law will mean fewer investors would have to ask for permission to buy, which makes raising new capital by banks easier," said Pavel Medvedev, deputy chairman of the parliament's banking committee.
The new law should pave the way for a $7.6 billion additional share issue by Russia's largest bank, state-owned Sberbank (SBER.MM: Quote, Profile, Research), as well as a $4 billion initial public offering by domestic rival VTB.
The Duma will debate the law for a third time, but after Friday's crucial second reading, only minor technical amendments can be made. The law will go into force after being passed by the Federation Council upper chamber and signed by President Vladimir Putin.
A similar law removing barriers for foreigners willing to buy shares in Russian gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research) triggered a rally in the gas company's shares at the end of last year.
Sberbank shares have risen 21 percent since the start of December, outpacing 3.7 percent growth on the RTS index <.IRTS> on anticipation of the law, despite the expectation of new shares flooding the market soon.
But the bank said in public disclosure documents on Friday that two of its board members had reduced their holdings substantially.
About a dozen Russian banks have listed shares, but stock in Sberbank, which has an unrivalled position on Russia's retail lending market thanks to its nationwide network of branches, is the most liquid.
As of July 1, 2006, foreigners fully owned 48 Russian banks, and the total share of non-residents in Russian banks stood at 12.92 percent.
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