Russia's VTB Bank warns of Q1 loss on securities

MOSCOW, June 6 (Reuters) - Russia's VTB Bank (VTBRq.L) lost more than $400 million on its securities portfolio in the first quarter of 2008, it said on Friday, but tried to allay investor concerns by pointing to growth in commercial banking.

It estimates a more than $400 million loss on the sale of securities and a lower market value on its portfolio, the bank said in a statement to the London Stock Exchange.

"The combined effect from these charges is expected to be a loss from the securities portfolio exceeding $400 million in the quarter," the company said.

"Despite this short term effect, which reflects both volatility on the securities markets and our strong risk controls, our underlying momentum remains with good growth in our corporate and retail businesses," Chief Financial Officer Nikolai Tsekhomsky said in the statement.

VTB Bank showed a profit on its portfolio for the same quarter of 2007, a spokeswoman said.

The bank holds a mix of foreign and Russian sovereign and corporate debt, as well as stocks and shares. The bank declined to specify which instruments were at the root of the loss.

VTB stock has underperformed both its Russian peer Sberbank SBER03.MM and the wider European industry .SX7P by about 8 percent on investor concern about the portfolio since the beginning of the year. Forecast-beating 2007 results failed to ease pressure on the stock.

First-quarter results are due out on July 16, the bank said. (Writing by Melissa Akin; Editing by David Holmes)