Interview: SocGen Russian unit to cut costs, bolster margins
By Katya Golubkova and Oksana Kobzeva
MOSCOW (Reuters) - Societe Generale's (SOGN.PA: Quote) Russian unit Rosbank will cut costs and prioritize improving margins while lending at least 13 percent more in 2013 as it emerges from years of costly restructuring as a viable player in the state-dominated market.
SocGen has struggled to curb costs in Russia and integrate acquisitions made at high valuations during the boom years before the 2008 global crash - pressures that have caused other Western players to pull out of Russia.
Chief Executive Vladimir Golubkov told Reuters in an interview that Russia's No.9 bank by assets was sure of its French parent's long-term backing as it draws up a three-year strategy aimed at driving up profitability.
"Rosbank has good growth potential," Golubkov, Rosbank's CEO since 2008, said. "Russia is Societe Generale's second most important market and a priority development target."
His comments were cleared for publication on Tuesday, after SocGen, France's second-largest bank, reported a 50-percent decline in first-quarter profits and announced a further round of cost cuts.
Rosbank lost market share last year, with its loan book growing by 4 percent compared to broader market growth of 26 percent.
Its cost-to-income ratio, a key measure of operational efficiency, stood at 65.7 percent, above a sector average of 51 percent, according to Natalia Berezina, an analyst with Uralsib.
State-controlled market leader Sberbank (SBER.MM: Quote) enjoys a return on equity of over 20 percent - more than double the target of 10 percent that Rosbank hopes to reach by 2015 under its proposed recovery strategy. Continued...