Sberbank misses profit expectations

Sberbank, Russia&rsquo;s biggest lender, missed its forecast for its third quarter net profit but analysts took heart from slowing bad loan growth which they said could pave the way for a stronger performance in the coming months.<br /><br />The state-run bank posted a net profit of 4.2bn roubles (&pound;87.4m) in January-September, undershooting analysts&rsquo; forecasts of 5.1bn roubles, as provisions for bad loans rose by more than expected.<br /><br />But the rate of growth in non-performing loans fell in the third quarter to 1.5 percentage points from 2.9 points in the second, Sberbank said.<br /><br />Russia&rsquo;s banks have been hit hard by a recession, which has left an increasing number of debtors unable to repay loans. <br /><br />But recent newsflow points to some improvement in both the broader economy and the financial sector.<br /><br />Sberbank increased provisions by 105.8bn roubles, or 27 per cent, to 493.8bn roubles while the share of non-performing loans rose to 7.9 per cent of its total loan portfolio from 6.4 per cent in the second quarter.<br /><br />The coverage ratio of provisions to the loan book reached 8.9 per cent compared with 3.8 per cent at the beginning of the reporting period, the bank said.