Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon. Mr Gref, your colleagues have shown me the bank's operations. Sberbank has been modernised spectacularly, and is increasing efficiency. Half of all Russian private clients are Sberbank's, so it bears tremendous responsibility.

Its portfolio is increasing. Sberbank is funding and crediting 30% of the national economy, if I am not mistaken. I wish you every success and hope other banks will also gain a firmer footing, and win over new clients.

That is not a simple task-they will have to compete with you, and your advantage of vast resources stocked up over decades.

I hope you will use your stronger position to become one of the best banks not only in Russia or in Europe, but also in the world. Sberbank has every opportunity for this breakthrough-efficient young managers, support from the Government and the Central Bank as one of your largest stockholders, and public confidence, the greatest treasure of all.

Sberbank is regaining depositors despite today's difficulties because people find it reliable ...

The work with private and corporate clients leaves ample room for improvement. The increase in bad assets is inadmissible-but it would be just as inadmissible to close the portfolio. To preserve it is a test of proficiency.

Closures are easy. It is far harder to work with clients, whether corporate or private, and to select the reliable and the promising. This principle applies to the entire economy. It is your duty to follow it, and you can cope.

There is another thing I want to call your attention to. You are quite right about cutting expenses, improving services, etc. We have also enumerated the advantages of Sberbank. One of them, on a par with public confidence, is the vast inherited chain of branches. It is, however, something of a burden, because some branches operate at a loss.

Sberbank cannot abolish this chain. In a way, you pay for government support by maintaining this chain. We cannot afford to close local Sberbank offices before there are other opportunities for quality bank services in every Russian town and village. I have said this to all Sberbank Board members, Mr Gref and the Central Bank President, who shares my view, as far as I know. Please take the matter into account.