Russia’s Sberbank Enters Aircraft Leasing with Boeing Order

 - April 8, 2013, 11:00 AM
Boeing International president Shephard Hill, left, and Sberbank CEO Herman Gref sign an order for 12 Boeing 737-800s in Washington, D.C. (Photo: Bill Carey)

Sberbank, Russia’s largest bank, took what executives describe as an historic first step into aircraft leasing last week as it ordered 12 Boeing 737-800s. Expected to spur further financing and leasing of imported aircraft in Russia, the transaction calls for the bank’s Sberbank Leasing subsidiary to place the airplanes with Moscow-based Transaero Airlines.

While appearing at a signing ceremony in Washington, D.C., on April 4, Sberbank chairman and CEO Herman Gref said the bank has held discussions with Russian flag carrier Aeroflot, which he said needs 100 new aircraft over the next decade, as well as other carriers. “The next deal will be a big deal,” he said, predicting a 50-aircraft transaction. “We see the Russian market as a big potential [opportunity] for Boeing products.”

Boeing values the 737 order from Sberbank at $1 billion at current list prices. It plans to deliver the airplanes in 2015 and 2016. The relationship between Boeing and Sberbank started “one year ago in my office,” said Gref. “We learned about the culture [of aircraft leasing] and the risk-management system. Now we’re ready to begin the first deal.” Boeing International president Shephard Hill said the manufacturer forecasts a Russian market for 1,000 new aircraft over the next 20 years, and that Sberbank’s financing of aircraft represents “another tool in the kit” that airlines can use in their long-term fleet planning. “It’s not the number [of aircraft], it’s the competency of financing,” he said in reference to the first order from Sberbank. “It’s a significant milestone.”

The Central Bank of Russia–the founder and principal shareholder in Sberbank–owns 50 percent of its authorized capital plus one voting share; domestic and international investors hold the rest of the shares, according to the bank. As of January, Sberbank held equity of $55 billion, representing 27 percent of the aggregate capital of Russian banks. Established in 1993, Sberbank Leasing deals in leases involving custom-made machinery, cars and trucks and financing of capital investment projects. The value of its 2012 leasing portfolio totaled 220 billion rubles ($7 billion).