YEREVAN, July 31. /ARKA/. Sberbank, Russia's top lender, is creating a new captive investment fund to invest into shares, derivatives and structured instruments, it said in a statement on Monday, according to Reuters agency.

Sberbank, with equity of 1.6 trillion roubles ($50 billion) and one the highest return-on-equity (ROE) ratios in the world, is already exploring new sectors, buying Russia's oldest brokerage Troika Dialog last year and recently starting international expansion.

"Sberbank Merchant Banking will have the task of creating a high-yield securities portfolio of the clients of the corporate investment block - key representatives of various sectors of the economy," the lender said.

Sberbank, whose market capitalisation of $63 billion makes it Europe's No.2 bank after HSBC, accounts for around one third of overall lending in Russia, a country with a $1.9 trillion economy.
It recently started an international foray, snapping up Eastern European lender VBI and agreeing to buy Turkish DenizBank.

Oscar Ratsin, the head of the new merchant banking division, told Reuters the unit will invest between $5 million and $50 million into each project or even more, depending on the business and the particular client.

"We are trying to invest into clients to whom Sberbank is already lending and knows pretty well... We are looking at such options as a direct participation in capital, investments into derivatives, call-options, financing ahead of initial public offerings," he said.

Ratsin, who has worked for Sberbank for three years, said that Sberbank Merchant Banking is aiming to show ROE at the same level as its parent bank, which delivered 27 percent last year.

"Depending on the projects, we may think who might be our co-investor in each particular deal," he said, adding that Sberbank Merchant Banking may also invite foreign partners to some of its projects.

The new unit already has over 20 deals in the pipeline, Ratsin said, declining to elaborate.—0-