MOSCOW, May 28 (Reuters) - Russia’s top bank Sberbank expects its interest margin to recover by year-end, helped by a lowering of the central bank’s key rate, the chief financial officer said on Thursday.
Sberbank’s net interest margin (NIM) shrank by 2 percentage points in the first quarter year-on-year to 3.7 percent, the bank said earlier on Thursday, hurting profits which were down 58 percent.
Alexander Morozov, the bank’s CFO, said on a conference call he expected the bank’s interest margin in the fourth quarter of this year to be comparable to the level in the fourth quarter of 2014. For Q4 2014 its NIM was 5.4 percent.
He said he expected the central bank to lower its key interest rate to around 10-11 percent by year-end, from 12.5 percent at present.
Morozov said the bank was holding off from giving updated guidance for the bank’s full-year performance until after it publishes second-quarter results.
He also said that Sberbank continues to create loan-loss provisions for its business in Ukraine and that he did not expect the bank’s cost of risk to be seriously worse in the second quarter than in the first quarter.
Sberbank’s cost of risk in the first quarter was 250 basis points.
Reporting by Alexander Winning and Oksana Kobzeva; Editing by Alison Williams