Why would a lauded bank CEO fresh from an $8.8 billion share placement be removed and replaced by someone who has never worked in a bank? In Russia the answer is obvious: The successor is close to President Vladimir Putin.
Andrei Kazmin abruptly lost his job October 8 after 11 years of dragging dusty state monopoly Sberbank into the modern age. February’s rights offering marked Russia’s second-biggest equity issue ever. “Kazmin turned Sberbank into a real bank that can compete with commercial banks,” comments Sergei Rutkovsky, research director at Moscow consulting firm Rating.
His replacement, approved a week later by the bank’s state-dominated board, is German Gref, an economist who until September served as minister of Economic Development and Trade.
Officially, Kazmin was promoted to a cabinet-level slot overseeing Russia’s postal service. The change was suggested to Putin by new Prime Minister Viktor Zubkov. “Considering Kazmin’s great experience, I would like to ask you to accept him for work in the government,” Zubkov told his boss.
Analysts say the courtly etiquette masked a simple power play by Gref, 43, a St. Petersburg native who has worked with Putin since the president’s days as deputy mayor of the northern capital. “Gref wanted a rest from the pressures of being a minister but wanted a position where he could still oversee large financial flows,” says Oleg Ivanov, a staffer for Anatoly Aksakov, deputy chairman of the Duma’s Committee on Credit Organizations and Financial Markets. “Kazmin comes from Moscow financial circles and has never been close to the president, so he couldn’t stand his ground.”
Like other Putin men at major state companies -- Alexei Miller, CEO of Gazprom, for instance, or Rosneft chief Sergei Bogdanchikov -- Gref is a figure investors can live with. He was viewed as an embattled liberal bastion during his seven years in the cabinet. Sberbank’s shares hardly reacted to the change of power, tracking the Russian Trading System index for the rest of October.
Gref himself stressed continuity while speaking to reporters after his board approval. “A major bank is a conservative bank,” he said. “If more than half of the national savings deposited by individuals are kept there, then it is duty-bound to be very careful.” Analysts guessed he was trying to persuade Kazmin’s top subordinates to stay on after three of them demonstratively announced they would sell their small shareholdings. (Alla Alyoshkina, Kazmin’s first deputy and common-law wife, relinquished a 0.02 percent stake.)
“When Kazmin came to Sberbank, there was a question of whether it would survive or not,” says Olga Veselova, a banking analyst at Troika Dialog in Moscow. “Now it’s hard to see too much downside long term.”
