Sberbank's Undervaluation Amidst Market Highs

Sberbank, Russia's biggest bank, claims undervaluation despite a market rally inspired by talks between the U.S. and Russia. The bank's shares hit a high due to a record dividend announcement. Meanwhile, Sberbank's robust profits continue to attract Russian investors despite market volatility.

Sberbank, the leading Russian bank in market capitalisation, considers itself undervalued, even as U.S. President Donald Trump's announcement regarding Ukrainian conflict resolution buoyed its shares to a seven-month peak on Thursday. The discussions between Trump and Russian President Vladimir Putin triggered a widespread appreciation in the rouble and Russian stocks.

The shares of Sberbank traded 0.9% lower by 1231 GMT at 311.0 roubles, having previously reached their highest level since July 10, 2024. This surge was driven by news of a record dividend payout. According to finance chief Taras Skvortsov, Sberbank remains challenged by market undervaluation but continues to appeal to Russian investors during volatile periods.

A retail investor, who added to his portfolio with Sberbank shares in November, reported a 42% return. Sberbank declared record annual profits in 2024 of 1.56 trillion roubles under Russian accounting standards, bolstered by high interest rates and robust corporate lending.