* Sberbank Q1 net profit $1.8 bln, beats forecast * Improves guidance for profitability, economy * Shares outperform MICEX index * CFO says still not enough good borrowers (Adds improved guidance, CFO comment, bullets) By Alexander Winning and Oksana Kobzeva MOSCOW, May 25 (Reuters) - Russia’s top bank Sberbank delivered a record first quarter profit despite Western sanctions over the Ukraine conflict, but warned its margins would remain under pressure. Sberbank’s finance director said on Wednesday any improvements in profitability and loan growth would not be dramatic as Russia’s central bank would probably ease monetary policy only modestly, while quality borrowers remained scarce. One of several large Russian state banks under Western sanctions over the Ukraine crisis, Sberbank has nevertheless outperformed since the Russian economy slumped in 2014. Sberbank’s dominance of the Russian market, where it has around a third of total sector assets and roughly the same share of deposits, has put it in a strong position to capitalise on the economy’s more stable footing so far this year. “With a gradual stabilisation in macroeconomics and potentially some improvement on geopolitics, we could see stronger demand from good names,” Sberbank’s chief financial officer Alexander Morozov told a conference call. “But uncertainties remain,” Morozov said. The strong result distanced Sberbank further from struggling rivals and its shares closed 3.5 percent higher, outpacing the broader MICEX index which ended up 0.8 percent. Russia’s second-largest bank VTB made net profit of just 0.6 billion roubles in the first quarter, while many smaller Russian banks remain loss-making. Sberbank said its net interest earnings rose sharply in the first quarter, while risk management costs fell. The bank said in a presentation it expected its net interest margin for 2016 to be above 5 percent, versus 4.4 percent last year, while its return on equity would be in the mid-to-high teens versus 10.2 percent in 2015. It now expects cost of risk this year of 200-250 basis points (bps), versus 250-300 bps in a previous forecast, and a gross domestic product contraction for Russia of 0.7 percent against former estimates for a 2.2 percent decline. Sberbank’s net profit of 117.7 billion roubles ($1.8 billion) in the first three months of 2016 was the first time it had made over 100 billion roubles in a quarter and beat analysts’ forecasts of 106 billion roubles.. ($1 = 65.5068 roubles) (Editing by Jason Bush and Alexander Smith)
Sberbank - 1Q16 net profit of RUB 117.7bn ($1.8bn), beating estimates, despite Western sanctions but warned its margins will remain under pressure.