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Н.С. Вовченко, В.А. Кочка, Н.С. Погореленко

PEST АНАЛИЗ СБРЕБАНКА РОССИИ

Ростовский государственный экономический университет, Б. Садовая ул., 69, Ростов-на-Дону, 344002, Россияe-mail: nat.vovchenko@gmail.com

Данная статья посвящена оценке воздействия внешних факторов на стратегию Сбербанка. В работе оценивают-ся основные тенденции рынка в отрасли. PEST анализ это инструмент для долгосрочного стратегического планиро-вания сроком на 3-5 лет. В ходе проведенного PEST анали-за Сбербанка был учтен ряд внешних факторов, таких как: политические (стабильное правительство, налоговая поли-тика, регулирование международной торговли, социальная политика), экономические (тенденции ВВП, инфляция, безра-ботица, мировой экономический кризис), социальные (демог-рафия населения, социальной мобильность, распределение доходов, традиции, труда и отдыха, уровень образования населения), технологии (инновации, скорость распростра-нения новых технологий, доля устаревших технологий, го-сударственная поддержка для развития новых технологий), правовые (законы о конкуренции и монополизация производс-тва, законы о занятости, Трудовой кодекс, законы о защите здоровья работников, лицензирование продуктов).

Ключевые слова: финансовый рынок, финансовые инс-трументы, политические факторы, экономические факто-ры, социальные факторы, технологические факторы, пра-вовые факторы, факторы окружающей среды.

1 Vovchenko Natalia G., Dr Sci (Econ) Finance Department, e-mail: nat.vovchenko@gmail.com Вовченко Наталья Геннадьевна, д-р экон. наук, профессор, каф. финансов, e-mail: nat.vovchenko@gmail.com2 Kochka Vladimir А., Post Graduate Student, Rostov-on-Don, Rostov State University of Economics, Senior citigold executive, ZAO KB “Citibank”, Pushkinskaya

48/39-41, Rostov-on-Don, 344000, e-mail: vkochka@mail.ru Кочка Владимир Анатольевич, аспирант РИНХ, ст. руководитель ЗАО КБ «Ситибанк», Пушкинская 48/39-41, Ростов-на-Дону, 344000, Россия, e-mail:

vkochka@mail.ru3 Pogorelenko Nikita S., Student, University College London (UCL), Gower street, London, WC1E 6BT, UK, e-mail: nikpogorelenko@gmail.com Погореленко Никита Сергеевич, студент Всемирного лондонского университета (UCL), Gower street, London, WC1E 6BT, UK, e-mail: nikpogorelenko@

gmail.com

Received December, 4 2014 Дата поступления – 4 декабря 2014 года

УДК 336.71

N.G.Vovchenko1, V.А. Kochka2, N.S. Pogorelenko3

PESTLE ANALYSIS. SBERBANK RUSSIA

Rostov-on-Don State Economic University , B.Sadovay st., 69, Rostov -on-Don, 344002, Russiae-mail: nat.vovchenko@gmail.com

The article analysis is aimed at identifying the impact of the environment on the strategy of Sberbank. The paper evaluated the key market trends in the industry. As a result, a PESTLE analysis was conducted - the list of threats. PESTLE analysis is a tool for long-term strategic planning and compiled for 3-5 years ahead. During the PESTLE analysis Sberbank were following external influences: political (stable government, tax policy, international trade regulation, social policy), economic (GDP trends, inflation, unemployment, the global economic crisis), Social (demography of the population, social mobility, income distribution, tradition, work and leisure, education level of the population), technology (innovation, speed of diffusion of new technologies, the proportion of obsolete technologies, government support for the development of new technologies), Legal (competition laws and the monopolization of production, the laws on employment, Labour Code, laws on the protection of employees’ health, licensing products), and Environmental.

Keywords: financial market, financial instruments, Political factors, Economic factors, Social factors, Technological factors, Legal factors, Environmental factors.

DOI: 10.15217/issn1998984-9.2015.28.99

PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors, which are used to assess the market for a business or organisational unit [1]. It has a number of advantages. PESTLE provides a simple framework for analysis of a company and aids and encourages the development of strategic thinking within the company. Although PESTLE is very beneficial for a company, it has its own limitations. Managers can oversimplify the information, which may lead to inappropriate strategic decisions. Furthermore, the analysis should be used regularly within a company in order to identify any trends [2]. An organisation on its own cannot affect external factors, nor can these factors directly affect the profitability of an organisation. But by understanding these environments, it is possible to take the advantage to maximise the opportunities and minimise the threats to the organisation [3]. This paper will use PESTLE analysis to identify external threats and opportunities of Sberbank, which is the biggest bank in Russia, with a yearly revenue of 30b dollars, total assets worth 490b dollars, employing 290,000 people. It has

a diverse portfolio and is involved in everything, ranging from commercial to investment banking [4].

Political FactorsGovernment policies and structure. Changing of

governor of the Bank of Russia in 2014 may have an impact on interest rates. The candidate has been chosen by the Russian parliament. According to ex-Presidential Executive Officer, Alexandr Voloshin, the new governor will have very liberal views on the economy. Since she may cut interest rates, the rate of borrowing in Russian banks may fall as well. As a result, there will be increased demand on banking services, especially on commercial sector services, because lower interest rates means that it is cheaper to borrow.

Trading policies. According to the data provided by the Ministry of economic development of The Russian Federation for 2012, Russia is one of the leading countries in international trade, with net exports around 140,400m dollars (compared to 128,000m in Japan and 200,000m in China) [5]. Russian entry in the WTO (World Trade Organisation) may increase the positions of Russian exporters within international markets, which will lead to an increase in demand

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for any types of corporate finance both in Russia and abroad. Sberbank is one of the leading providers of corporate finance in Russia. Now it is able to compete with many Western banks such as BNP Paribas and UBS. According to Andrey Ivanov, (executive manager of corporate finance department in Sberbank) the trade finance portfolio increased from 2 to 12.5 billion dollars since 2010, due to the successful strategy of international expansion. Therefore, there is an opportunity for Sberbank to increase its customer base internationally [6].

Capital structure. The Russian government owns 51 % of Sberbank’s shares [7]. Therefore it is reasonable to assume that the bank’s strategy will be aligned closely to political interests.

Economic FactorsInflation. High inflation rates usually go hand in hand

with high nominal interest rates and will eventually lead to high real interest rates, which reduce the profitability of credit-financed investment projects and increases income gearing in real terms [8]. Inflation in Russia is very high due to a constant increase of aggregate demand [9], which leads to economic growth. Such a demand-pulled inflation makes investment in Russia very uncertain. As we can see from graph below, inflation was 15.8 % in 2002 and 14.1 % in 2008.

Figure 1. CPI Index of inflation (2000-2009)

Hence, it was very risky for banks to invest in long-term projects, as they usually were able to make only nominal profit. Sometimes they were in losses as their finance generated from the return had less value than anticipated. But now inflation growth is falling and it will be less risky for banks to give “long money”. According to the Bank of Russia, the inflation growth in 2014-2015 is expected to be 4-5 % [10]. Therefore, there is an external opportunity for the CIB (Corporate Investment Banking) branch of Sberbank to generate higher returns with less risky long-term projects.

Barriers to entry. The second point borders with legal factors, but it has a crucial economic importance for the industry. Since 2013, barriers to entry to Russian banking industry became much higher. In order to start up a bank, the smallest capital should have been more than 90 m rubles before 2012. From 2013, newly established banks should have at least 300m rubles worth of capital. According to [11] the policy will both reduce potential competition for big banks such as Sberbank, and will increase reliability of banks in Russia, as smaller banks become bankrupts more often [12].

Economy trends. Because of a strong economic growth in Russia (4 % on average for the last 10 years (reference below)), there was an increased capital investment. The economic growth was 8-10 % in the period 2006-2007. A lot of businesses were asking for financing, as there was spare capacity in the economy due to a fast growth of aggregate demand. Hence, Sberbank was benefiting from the strong growth of Russian economy. Alternatively, when economic growth was negative from 2008 to 2009, there was high unemployment in Russia, just above 10 % [13]. As a

result, there was a cut in demand on any types of banking services as many business activities in the economy were frozen.

Figure 2. Gross Domestic Product Growth in Russia 2005-2012[14]International exposure. In recent years, Sberbank

has substantially extended its international presence beyond CIS - Kazakhstan, Ukraine and Belarus – to nine countries of Central and Eastern Europe via Sberbank Europe AG (former VBI) and Turkey, via acquisition of DenizBank. The latter was acquired in September 2012 and represents the largest acquisition in Sberbank’s 170-year history. Sberbank also has representative offices in Germany and China, a branch in India and also operates Sberbank Switzerland AG [15].

Social FactorsSocial trends. There is a strong change in the

proportion of people representing the middle class. In 2001, only 15 % of people could be called middle class according to their income. In 2012, more than 37 % of Russian population represented the middle class [16]. There is a positive trend of transition from the low-income population to the middle-income population, which leads to an increase in consumer expenditure. Such a transformation results in an increase in demand for different types of loans. For example, for the first 6 months in 2011, there were 1.5 times more car loans than in 2009 [17].

Education. Qualifications became one of the core values in modern Russian society. The priority in getting a higher education increases in the financially educated proportion of people. According to statistics, there should not be any shortage of qualified specialists for the bank industry, as most of the people want to get a higher education in finance. Only 14 % of students are studying engineering, 3.2 % geology, 2.9% agriculture and 45 % of students are doing social sciences, entrepreneurship and law, comparing to 36 % in the USA and 22.5 % in Germany [18].

Technological FactorsTechnology implementation. Generally it can be

noted that the development of information technology had a significant positive impact on the banking industry. Sberbank was able to improve the quality of service with the appearance of internet banking. Bank clients are able to monitor and have faster access to their accounts. Technology, such as internet banking, contributes to cost minimization of a company, as the bank will need less operators in local banks. Hence, technological factors underline a positive impact on financial efficiency of Sberbank. Sberbank provides banking services in all of the 83 sub-federal units of Russia, operating a unique branch network which currently consists of 17 Regional Banks and more than 18,400 branches. In the meantime, the bank also offers services through a new distribution channel - one of the world’s largest networks of ATM machines and self-service terminals (~68,000). Sberbank is also actively developing its Mobile Bank and Sberbank Online applications

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with a massive client base totaling over 9.4 m and 5.4 m active users respectively.

Legal FactorsInformation disclosure. Sberbank is a public limited

company. All the depositors, investors and shareholders have access to the real information about the financial position of the company. The bank publishes financial reports quarterly. According to a research on transparency investigation of Russian companies by the agency Standard & Poor’s, Sberbank came 23rd in the transparency rank in 2012.

Current legislation. There is a law that covers all the banks in Russia; all the bank accounts are insured. If a bank becomes bankrupt a client can get back 700,000 rubles (13,000 GBP). It represents social financial security that increases the confidence of depositors.

Environmental FactorsEnvironmental regulations. Sberbank is orientated on

production of services, not goods. Therefore, the social cost in case of pollution is not significant. Nonetheless, Sberbank is trying to become more environmentally friendly. According to, it increasingly uses data in digital format rather than its printed versions and energy consumption was reduced by 20 % in the last 5 years. This all contributes to a positive image of the bank.

Sberbank provides business finance to the companies such as Uralhim Ltd that harm the environment [19]. This may concern the Corporate Social Responsibility of Sberbank.

According to researched material, many factors can be interpreted as beneficial for Sberbank; economically, the outlook is very positive. PESTLE analysis helped to develop the framework that, to some extent, can help managers with their strategic decisions. Sberbank has substantial opportunity to grow and to receive higher returns from both Russian and international accounts. The question remains, whether it will be able to compete with well-established international banks.

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