UPDATE 3-VTB to hit full-year targets ahead of stake sale

* Reiterates full-year profit target of 50 billion roubles

* Considers acquisistions in CIS countries

* State says may sell 10 pct stake to investor by year end

* Bad loans ratio falls for first time since start of crisis

* VTB shares up 0.1 pct at 0.08 roubles, index up 0.5 pct

(Adds director comment, detail)

By Dmitry Sergeyev and Oksana Kobzeva

MOSCOW, Sept 2 (Reuters) - VTB, Russia's second-biggest bank by assets, said it was on target to meet 2010 profit forecasts, underpinning government hopes to sell a 10 percent stake to a strategic investor by the year end.

VTB reiterated a full-year net profit target of 50 billion roubles ($1.63 billion) after it posted 25.1 billion roubles for the first half, ahead of a Reuters poll forecast of 24.8 billion roubles, despite a rocky second quarter for global markets.

It said its bad loans ratio eased for the first time since the start of the financial crisis to 9.5 percent and would likely peak by end September, cementing the group's recovery from the 2009 financial crisis.

"We have an ambitious 2010 net profit forecast of 50 billion roubles and we reiterate this forecast ... We expect that the share of non-performing loans will peak in the third quarter and will not exceed 10-12 percent," Finance Director Herbert Moos told reporters on Thursday.

VTB shares were up 0.12 percent at 0.08 roubles by 1412 GMT, while the overall Moscow market was up 0.57 percent.

Last week, Russia's biggest lender, Sberbank SBER03.MM, reported a worse-than-expected profit for the second quarter as its bad loans and provisions continued to grow. [ID:nLDE67O18H]

VTB approved a new strategy last May which points to the possibility of a partnership or acquisition as it looks to expand into direct consumer lending. [ID:nLDE64P26N]

VTB is also looking at possible acquisitions in the Commonwealth of Independent States (CIS) which includes most of the former Soviet republics, Moos said on a conference call.

"It makes sense for VTB to continue to look for acquisitions and potential organic growth in that region, it is part of the bank's strategy," David Nangle at Renaissance Capital said.

The bank is already in talks to buy rival TransCreditBank, the banking unit of state monopoly Russian Railways, media has reported [ID:nLDE664017]. But Moos said VTB has not reached any specific agreements with TransCreditBank so far.

STATE SALE

VTB, 85.5 percent controlled by the state, is at the front of the queue in Russia's upcoming auction of government assets, which may bring up to $29 billion to the state coffers, and the bank may see a 10 percent stake hived off by the year end.

Alexei Savatyugin, a deputy finance minister, said the state also hoped to divest another 25 percent in 2011-2013.

The group said last month it was working with potential investors including Middle East government groups, although VTB's Moos said no talks were underway with oil rich Kuwait.

Its investment banking arm VTB Capital, which boosted profit to 9.7 billion roubles in the first half against 1.8 billion roubles and has a strong pipeline of deals in the second half, could attract foreign investors.

"We see rich opportunities for further growth with capital markets activity picking up after the second quarter pullback ... We also see a strong pipeline of both debt and equity deals," VTB Capital President Yuri Soloviev said in a statement.

VTB's Moos also said the bank planned to borrow $2 billion in overseas markets by the end of 2010, while its group margin would likely hit 5 percent by the same date.

The group's second-quarter performance fell short of its record first-quarter net profit of 15.3 billion roubles, due to uncertain financial markets and a 15 percent decline in Russia's dollar denominated stock market RTS .IRTS, the bank said.

"The recovery remains fragile and the second quarter was marked by very challenging market conditions on the back of European sovereign debt problems," it said in a statement.

The group made a 31.5 billion rouble loss during the crisis-hit first half of 2009. (Writing by John Bowker; Editing by David Cowell) ($1=30.75 Rouble)