A joint venture in online trading is expected to be set up between Sberbank and Alibaba, a Chinese internet company, in the first half of 2017, according to press reports released on January 18, 2017.

Sberbank plans to supply the cash for the new venture, whereas Alibaba will bring to the table its well-developed cross-border e-trading business.

The likely value of the new company will easily exceed a billion dollars, as the entity emerges to become Russia’s biggest e-commerce marketplace. One of Alibaba’s divisions, AliExpress, is presently among the most in-demand internet shopping platforms in the country.

Sberbank is Russia’s largest bank and the biggest financial institution in Eastern and Central Europe. The bank’s share capital is RUB67.76 billion (USD1.204 billion). Russia’s Central Bank has a 50-percent voting stake, plus one extra share of stocks, in Sberbank. Sberbank has 17 regional branches throughout Russia, in addition to locations in Kazakhstan.

In the first half of 2016, Sberbank’s net profits under International Accounting Standards increased 3.2-fold to RUB263.1 billion (USD4.674 billion). The financial institution’s net interest income soared 55.5 percent to RUB664.8 billion (USD11.811 billion), even as net commissions income rose 15.3 percent to RUB163.1 billion (USD2.897 billion).

The bank’s eight-month net profit for 2016 in line with Russian Accounting Standards increased 2.9-fold to RUB322.788 billion (USD5.69 billion). Net interest income reached RUB734.9 billion (USD13.056 billion), demonstrating a 51.6-percent growth. Net commissions income increased some 22.8 percent to RUB198.4 billion (USD3.525 billion).

The bank saw its operating expenses increase 11.2 percent, while the expenses-to-revenues ratio declined from 39.5 percent to 32.6 percent over the course of the reporting period.