OTKRITIE FC Makes Preview of Bank Vozrozhdenie 3Q09 IFRS
OREANDA-NEWS. Bank Vozrozhdenie is slated to release its 3Q09 IFRS results on Wednesday, 25 November (at noon, Moscow time), followed by a 5:00 pm conference call, at +44 (0) 203 003 2649, reported the press-centre of OTKRITIE Financial Corporation.
View: We expect the bank to post RUB255m in net profit for the quarter and RUB897m (US 28m) for 9M09. The bank‘s net interest revenues will likely decline 5% QoQ as the result loans being repriced, while the funding base remains quite expensive. This will lower the bank’s NIM from 8.0% in 2Q09 to 7.6% in 3Q09. We also expect the bank to provision RUB1.2bn, a slightly (4%) lower charge than in the previous quarter, which will push the provisioning ratio to 9.0% of gross loans. Considering the unstable lending quality, we believe that cost control will remain tight and thus forecast flat costs QoQ.
Action: We believe that most investors anticipate slightly deteriorating margins, and expect comments from bank management during the conference call to generate more of a reaction than the results themselves. We have a BUY rating on the stock with a US53.3 target price.
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