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Sberbank dividends: is it possible to receive dividends on converted depositary receipts?

The Supervisory Board of Sberbank recommended paying out dividends for 2022 financial year in the amount of 565 billion rubles, which equals to 25 rubles per share. This is a record amount for Sberbank dividends. The record date for the purpose of Sberbank dividends’ pay out is May 11, 2023. Accordingly, in order to receive dividends, Sberbank shares must be acquired prior to this date.

Sberbank dividends: is it possible to receive dividends on converted depositary receipts?

Posted 16 April 2023

Who can receive Sberbank dividends?

Despite blocking sanctions imposed by the European Union, the United States, the United Kingdom and a number of other jurisdictions against Sberbank, Sberbank dividends will be paid to the following groups of investors:

  • shareholders who hold shares through Russian brokers, and
  • shareholders who hold shares through non-Russian financial institutions and brokers (for example, those who purchased depositary receipts through a foreign broker and then converted them into underlying shares).

Therefore, as an example, Sberbank dividends can be received by shareholders who hold shares through an American broker – Interactive Brokers that converted all Sberbank shares in a voluntarily in 2022.

How to receive Sberbank dividends?

Investors who hold shares directly through a Russian broker will receive Sberbank dividends automatically. However, those who hold shares through foreign (non-Russian) organizations will only be able to receive dividends by submitting a special application with the branch of Raiffeisenbank Russia (a subsidiary of the Austrian banking group Raiffeisen Bank International) in Moscow. This is because Raiffeisenbank is a Russian custodian of all foreign brokers in respect of Sberbank shares (including Interactive Brokers).

At present, Raiffeisenbank has not published the dividend collection procedure for such investors, but according to bank reports, it is planned to be released shortly.

Based on our experience of collecting dividends in similar cases (e.g., in relation to shares of Norilsk Nickel, Novatek, etc.), it will most likely be necessary to open a bank account in Russia and provide Raiffeisenbank with documents confirming the ownership of depositary receipts at the time of submitting the application, as well as the record date, purchase date, and, if applicable, conversion date.

How to get prepared for claiming Sberbank dividends?

In similar cases in the past, Raiffeisenbank required submission of documents with legalization (or, if applicable, an apostille) and a notarized translation, and it is expected that the approach is likely to be similar in this case as well.

To open an account in a Russian bank, a power of attorney can be used. In this case, it would be necessary to legalize it along with the investor’s passport, and then translate the documents to Russian.

Considering that the legalization of documents usually takes up to 1 month, it is recommended for investors to start preparing documents for opening an account as soon as possible. Based on the experience of collecting dividends in the past, it can be expected that Raiffeisenbank will set a short deadline for submitting applications. Although the law does not define the consequences of non-collection of dividends, investors still risk losing the opportunity to receive Sberbank dividends if they do not apply within the deadline set by Raiffeisenbank.

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Possibility of dividend repatriation

Investors from friendly countries will be able to receive Sberbank dividends to regular accounts and repatriate them (i.e., transfer them to their accounts abroad). Investors from unfriendly countries, however, will be able to receive dividends on special “blocked” type-C accounts. At present, funds from type-C accounts can only be spent on reinvesting in Russian government bonds, paying taxes in Russia, and paying bank and depositary fees. Such funds can also be transferred to “blocked” type-C accounts of other “unfriendly” investors.

Note that the list of “unfriendly” countries, approved by the Russian Government, includes Australia, Albania, Andorra, the United Kingdom, all EU countries, Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, South Korea, San Marino, North Macedonia, Singapore, the United States, Taiwan, Ukraine, Montenegro, Switzerland, and Japan.

Why was it necessary to convert depositary receipts?

It is worth to recall that following the adoption of Federal Law No. 114-FZ on April 6, 2022:

  • Russian issuers are required to ensure the termination of depositary receipt issuance programs;
  • foreign depositary receipt issuers are obliged, within the timeframes established by the depositary agreements between them and the Russian issuers of the corresponding shares, to write off depositary receipts and pay investors the funds in the amount provided by such depositary agreements, which is usually significantly lower than the market value of the shares.

This also applies to Sberbank’s depositary receipts – this is why Interactive Brokers voluntarily converted the depositary receipts.

However, such consequences do not occur for investors who managed to convert depositary receipts in time. Moreover, although foreign issuers are formally required to write off depositary receipts and pay their value to investors, in practice, this is impossible due to sanctions and countersanctions restrictions. Therefore, the issue of converting depositary receipts is particularly relevant for investors.

As a general rule, depositary receipt holders are entitled to receive the shares for which such depositary receipts were issued through conversion. At the same time, Law 114-FZ stipulates that investors entitled to receive the underlying shares will be determined as of the effective date of Law 114-FZ. This means that after this date, the purchase of depositary receipts does not entitle the holder to receive the underlying shares, and therefore, the conversion of such depositary receipts is not possible.

Also, according to Law 114-FZ, investors can demand the payment of all unpaid dividends after converting their depositary receipts and receiving shares of Russian issuers, i.e., becoming direct shareholders of such issuers. This is particularly relevant for investors holding depositary receipts of such Russian issuers as Gazprom PJSC and Lukoil PJSC, as these Russian issuers distributed substantial dividends that could not be paid to depositary receipt holders due to sanctions and countersanctions restrictions. This also holds significant importance for those who have invested in Sberbank.


In summary, Sberbank shareholders holding shares through Russian brokers will be able to automatically receive dividends. Those who hold shares through foreign brokers should act swiftly and apply to the Moscow branch of Raiffeisenbank with a special statement. While the dividend collection procedure for such investors has not yet been published, it is expected to be released shortly.

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Diane, partner of GFLO Consultancy