OREANDA-NEWS. August 11, 2010. According to preliminary figures disclosed by its Board, Sberbank’s lending portfolio in July increased by RUB48.4bn, or +0.9% MoM, while retail deposits were up RUB66bn. By contrast, corporate funding was down RUB47bn. Sberbank Board member Aleksandr Morozov estimated the bank’s net profit for the month at RUB10-12bn., reported the press-centre of OTKRITIE Financial Corporation.

View: Sberbank continues to demonstrate strong results. It has now posted lending portfolio growth for a third consecutive month, a positive sign also indicating that lending quality concerns are no longer excessively pressing. From our standpoint, maintaining a strong retail funding base with a decline in corporate accounts will help the bank maintain better NIM, and thus will support profitability. We also note that with RUB72-73bn RAS net profit in 7M10 the bank seems to be slightly outperforming our RUB85bn IFRS net profit target for FY10.

Valuation and Action: The bank’s shares are trading on a 2010 P/BV of 2.3x and a 2011 P/BV of 1.8x. Given the bank’s exceptionally strong market positions, and strong NIMs that help generate robust revenue flows, we remain buyers at these levels.