OREANDA-NEWS. Sberbank will post FY09 IFRS results on Thursday, 18 March, with a follow-up conference call at 5:00pm (Moscow time), reported the press-centre of OTKRITIE Financial Corporation.

View: We expect the bank to post a net profit of RUB8bn for 4Q09 and RUB18bn for FY09. We believe the bank’s extremely high NIM decreased slightly in 4Q09 as declining interest rates filter through to price of assets a bit faster than to the cost of funding. We also believe that the bank’s provisioning charges were down 13% QoQ, both because bad loan creation slowed and because unlike in 3Q09 the gross lending portfolio has decreased. Due to unstable credit quality the bank has managed control costs, with a C/I ratio at 35%.

Action: We believe that most investors anticipate that Sberbank’s positions will remain strong. In the conference call, however, the key issue will be guidance for 2010, especially the outlook on lending growth and credit quality expectations. In addition, investors will likely be seeking information on the prospects for Sberbank's DR program, as well as looking for some clarification of Sberbank’s international expansion plans, both of which will be important factors for share price performance. Even though the stock trades expensively on a 2010 P/BV  of 2.3x, we see the premium as justified thanks to the bank’s ability to maintain strong margins and capability to manage quality issues. We have a BUY rating on the stock with USD3.6 target price.