Russia's leading lender Sberbank ( SBRCY , quote ) up 6% after delivering numbers that beat forecast and showed 70% improvement year on year, thanks to rising demand on loans in Russia, absence of investments in the problematic European Union area and improved loan quality. Sberbank's third-quarter report surpassed all analyst forecasts, posting net income of $2.55 billion vs $2.4 billion forecasted -- a more than 70% rise from a previous year.
Demand for loans-- especially from consumers -- has picked up during the first nine months of 2011. As SBRCY says, it is the obvious benefactor of that trend.
"The group is also benefitting from an increasing share of retail loans which are growing faster than corporate ones," management says.
Retail deposits and customer deposits remain a main source of funding for Sberbank.
Significantly, SBRCY does not have investments in the European Union countries or companies. All investments in foreign securities accounts for less than 3% of the portfolio.
Net interest margin increased in the second and third quarters of 2011 impacted by the growth of the interest earnings assets and cost of funds decreased from 3.6% to 3.3%.
Credit quality improved thanks to new risk management implementation and recovery procedures and Russia's relatively strong economic situation. Non-performing loans declined to 6.1%.