Sberbank Chief Removed, Sent to Post Office
President Vladimir Putin on Monday removed Andrei Kazmin as chief executive of Sberbank and appointed him to head the country's loss-making postal service, which is set for an overhaul.
Kazmin's departure from Sberbank — the latest in a string of personnel shake-ups since the appointment of Prime Minister Viktor Zubkov last month — had been widely predicted. German Gref, the liberal former economic development and trade minister who resigned last month, has been tipped as the favorite to take his place.
In a televised meeting, Putin agreed to a proposal by Zubkov to move Kazmin to Russian Post. The state company, which runs a giant network of offices, recorded a loss of USD 112 million last year and is ripe for an overhaul.
In making the proposal, Zubkov referred to Kazmin's service as Sberbank chief executive since 1996 and said his achievements there were "not bad."
"Considering his large experience, I would like you to invite him to work in the government and give him a sector that requires modernization and development," Zubkov told Putin. "That is Russian Post."
In agreeing, Putin praised the bank's performance and gave the credit to Kazmin and the rest of the management team.
In a meeting with Putin minutes earlier, which was also televised, Kazmin predicted the state-run bank was heading for a profit this year of 100 billion rubles (USD 4 billion) and noted that the bank had capital worth 3.78 trillion rubles (USD 150 billion) as of Oct. 1, consisting largely of deposits by individuals.
Sberbank had no official comment Monday on Kazmin's departure, when he would leave or who would replace him.
Kazmin's new area of responsibility will be "enormous," Putin said, because Russian Post has 40,000 offices, twice as many as Sberbank runs.
Kazmin will replace Russian Post director Igor Syrtsov, who asked to step down, IT and Communications Minister Leonid Reiman said in an e-mailed statement late Monday.
A spokesman for the company, which reports to Reiman's ministry, said that he had no comment on the appointment, adding only that it was unexpected.
In his new job, Kazmin could oversee a major revamp of Russian Post. In November, the Cabinet approved a five-year, 50 billion ruble (USD 2 billion) program to upgrade the company. The IT and Communications Ministry, the Economic Development and Trade Ministry and the Finance Ministry were due to submit an action plan by June 1.
But the Russian Post spokesman, who spoke on condition of anonymity in line with company policy, said Monday that the program had not yet begun.
In a sign that the ministries still wanted to go ahead with the upgrade, Finance Minister Alexei Kudrin and Economic Development and Trade Minister Elvira Nabiullina attended the meeting in which Zubkov asked Putin to transfer Kazmin. Kremlin chief of staff Sergei Sobyanin was also present.
Reiman expressed confidence Monday that Kazmin would improve postal services, a task that he described as crucial. "Developing Russian Post is an issue of the highest state importance today," Reiman said in his statement.
The government wants Russian Post to upgrade its offices, further expand the network, create computerized sorting centers and buy new delivery vans. In November, then-Prime Minister Mikhail Fradkov instructed the ministries involved in the program to make it possible for banks to use the postal network for money transfers and wire payments.
Under Kazmin, Sberbank has emerged as one of the country's best-performing stocks on the back of strong profits, and earlier this year it held a listing on local markets, raising close to USD 9 billion.
"Kazmin was a solid CEO," said David Nangle, an analyst at Renaissance Capital. "If judged on numbers alone — record profits and high returns — he has done a good job. Sberbank is a beast of a bank to manage. It can't be managed [by] a normal shareholder-stock approach. It is managed well for what it is."
But Sberbank has also been plagued by assertions of spiraling costs and poor corporate governance, while its position as the country's largest lender with the biggest customer deposit base means that it merely has to survive to thrive.
"It is very much the company being in the right place at the right time," said James Beadle, a fund manager at Pilgrim Asset Management. "It has lots of potential to improve its corporate structure and operations. [Kazmin's departure] raises opportunities."
The departure of Kazmin has raised broader questions about the musical chairs at the top. Investors say the appointment of Gref would be very welcome, given his reputation for market-orientated reform. Besides Gref, two other candidates are understood to be in the frame: Igor Zavyalov, a former deputy head of VTB, and Vladimir Dmitriyev, head of the Development Bank, formerly known as VEB.
So far, Sberbank has not said whether there will be other high-level departures, but Alla Aleshkina, Kazmin's deputy, is among those expected to leave.
"It tends to be the practice in Russia that when a new senior manager comes in, they bring their own team," said Richard Hainsworth, CEO of RusRating. "It would indicate that something similar could happen in Sberbank."
