OREANDA-NEWS. August 2, 2011. Sberbank’s supervisory board approved the bank’s new dividend policy which entails a dividend payout increase to 20% of IFRS-based net income within three years.

These plans have been mentioned by Sberbank’s top management on several previous occasions, and so the news was largely expected.

Last year Sberbank paid out 12% of RAS-based earnings in dividends (which for SBER closely resembles its IFRS bottom line) after allocating 10% of net income for these payouts in prior years. We anticipate that next year’s payout ratio should reach 15%, which would result in a dividend yield of 2.2% on the common shares and 3.7% on the prefs, based on current prices (please see details below).

Bottom line

The news is just marginally positive for Sberbank, in our view, as plans to gradually increase dividend payments have been announced before. Currently, we prefer Sberbank’s common shares to the prefs given that the latter trade at a 19% discount to the common vs the historical average of 25%.

Expected dividend calculation.

If we assume that Sberbank’s 2H11 profitability remains at the same level as in 1H11, we arrive at a FY11 bottom line of RUB340bn. A 15% payout ratio implies a total dividend payment of RUB51bn, 94% of which we assume would be attributed to the common shares and 6% to the prefs (in line with historical evidence).

Sberbank’s expected dividend yield

2011E

Expected net income (RAS, RUB mn)

Expected dividends paid (RUB mn)

Expected payout ratio

Expected dividend per share (RUB)

Current share price (RUB)

Current dividend yield

 

 

 

 

 

 

340,000

47,940

15%

2.2

103.3

2.2%

3,060

3.1

83.6

3.7%