OREANDA-NEWS. May 21, 2009. Sberbank forecasts a rise in loan provisions to 20% in 2010, but expects to retain the status of a profitable business. As for 2009, the country’s biggest lender does not rule out losses, but hopes to finish the year with neither losses nor profit. “We do not rule out seeing modest losses (in 2009), nor do we rule out moderate profit, most likely indicators will be close to zero,” Sberbank management board member Anton Karamzin said.

He went on to say that according to the baseline scenario the lending institution anticipates growth in reserves against loan losses to 9.5-10% by the end of 2009 compared to 4% at the beginning of the year (currently they equal 6%). “With a more optimistic scenario where allowances account for 8.5-9% of the credit portfolio, the lender will at least break even,” Karamzin said.

Next year Sberbank expects reserves to be raised to 20%, but projects profit. “Next year the lending institution would like to generate profits…in certain periods the aggregate reserve/portfolio ratio could rise to 20%,” the bank’s management board member said. “I hope that the bank’s performance will be positive. Next year Sberbank hopes to keep operating profit at quite a high level that will help it absorb the new reserves that will be accumulated,” he noted.