OREANDA-NEWS. January 27, 2010. Sberbank released 2009 RAS results, showing net profit of more than twice our forecast, while provisioning expenses at 7% were below our estimates. Loans and net interest income were in line with our figures, and retail deposits surpassed our estimates, reported the press-centre of OTKRITIE Financial Corporation.

View: Sberbank’s figures included some positive surprises, in our view, despite previous management guidance and prior 11M09 RAS numbers. The main surprise came from net profit line, which at RUB36.2bn was more than double the 11M09 level. We chalk this up to slightly lower provisioning expenses relative to our forecasts, and mark-to-market gains in the securities portfolio. Its core banking business was in line with expectations, that is, very healthy given the environment. 2009 NIM was at 8%, with the C/I ratio at 34% - both numbers significantly better than EM benchmarks. The growth of retail deposits near year’s end was pre-announced, but is nevertheless a positive driver for loan growth in 2010.

Valuation: Although its 2010E multiples are not cheap (P/BV of 2.2 and P/E of 17.7), the figures for 2011E (P/BV of 1.6 and P/E of 6.7) are already very attractive.

Action: We remain buyers of Sberbank and would welcome any systemic dip to increase our positions. The 2009 RAS results underscore our view.