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Sberbank says no need for fresh capital, Eurobonds

Sberbank, Russia's biggest lender, has no plans to tap the Eurobond market and has no immediate need for any fresh capital, the bank's first deputy chief executive Bella Zlatkis said on Wednesday.

Russian banks are struggling with losses as bad loans rise, eating into their profits and capital, but government officials, bankers and analysts have said the worst is over as the Russian economy shows some signs of recovery.

“Sberbank has taken the decision not to issue additional shares. We need no capital hike,” Zlatkis told reporters, adding that the bank was unlikely to return to the issue of raising capital until the second half of 2010.

Sberbank recently announced it expected to post at least 20 billion rubles ($698 million) in net profit in 2009 and that it was aiming for a much higher income next year.

“The extensive loan loss reserves built this year and a slowdown in non-performing loans growth should lead to decreased cost of risk in 2010, allowing Sberbank to return to pre-crisis ruble net incomes,” Unicredit Securities said in a report.

Sberbank, home to half of Russia's retail deposits, has no plans to tap the Eurobond market, Zlatkis said, despite an improvement in conditions as investor appetite for risk grows on the back of rising oil prices and the strengthening ruble.

“We see no reasons for the bank to tap the Eurobond market yet. We rather see the bank as an investor on the market,” Zlatkis said. (Reuters)