UPDATE 1-Russia's Sberbank to cut up to 25 pct jobs by 2014

* Sberbank to cut 20-25 pct of staff over 5 years

* Sees significant pick-up in profit next year

* Bad debt provisions expected to peak in H1 2010

MOSCOW, Nov 11 (Reuters) - Russia's Sberbank (SBER03.MM), expects profit to recover and bad loan provisions to peak next year, but still plans to slash up to a quarter of its workforce by 2014, a senior company official said on Wednesday.

The job cuts are in line with the state-controlled bank's business plan, which sees Russia's biggest lender reducing staff in coming years as it boosts productivity.

This year alone, it plans to cut its workforce by 10 percent, or around 27,000 people.

"Due to an improvement in productivity, we will have the possibility over five years to optimise staff by 20-25 percent," said Denis Bugrov, a member of Sberbank's management board.

"We confirm that this task is realistic."

Russian banks have been hit hard by the country's first recession in a decade, which has left many borrowers unable to pay at a time when the economy needs lenders more than ever.

A rouble devaluation and stock market losses from late 2008 to early 2009 added to the sector's problems.

But Sberbank -- which has so far stayed in the black unlike many rivals -- expects things to improve next year.

"In 2010 we see the possibility of moving from anti-crisis management to planned growth and development," Bugrov said.

"We expect a very significant improvement in the financial results for 2010 compared to 2009."

Bad loan provisions were likely to peak at around 12-14 percent of the total loan portfolio in the first half of next year but should fall somewhat afterwards, he said.

Sberbank is in talks over the possible acquisition of Kazakhstan's biggest bank, BTA BTAS.KZ.

"A decision has not been taken yet, but there is very constructive dialogue with the Kazakh partners. We are satisfied with how the work is progressing," Bugrov said.

In Septmber, Sberbank's finance director Anton Karamzin said a decision on BTA would likely be taken in November. [ID:nLA673677] (Reporting by Oksana Kobzeva; Writing by Toni Vorobyova; Editing by Dan Lalor)