Sberbank raising dividend to 20% of net income

Reports that Russia’s Sberbank is “only” boosting its dividend to 20% is still a fantastic improvement for a bank that is already the best in Eastern Europe.

Sberbank (SBRCY, quote)may be one of the best positioned banks in the emerging world.

It is definitely best positioned for earnings growth during the next 12 months.

Look at its peer group, all with different issues.

Chinese banks face massive problems in their lending portfolios.

Indian banks have been grappling with aggressive local interest rate policy.

And in Brazil, otherwise world-class banks are being sabotaged by credit quality concerns and government measures designed to impede their core business.

While Sberbank’s shares are still new under the SBRCY ticker symbol in New York and currently only trade on the pink sheets, this company is a linchpin of the Russian financial system.

It already trades 5 million to 10 million shares a day in New York.

A $7 billion secondary sale of shares is scheduled for September and is well priced into this stock.

Sberbank currently pays 12% of its net income as dividends. Going up to 20% would boost its yield to 9% — well above the Russian average and great for any bank of this size and complexity.

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