UPDATE 1-Russia's VTB plans benchmark samurai bond in 2010

* Sees transaction toward end of 2010

* Volume could be greater than $300 million

(Adds details, background)

By Dmitry Sergeyev

MOSCOW, Jan 21 (Reuters) - VTB (VTBR.MM), Russia's second-biggest bank, plans to sell a debut samurai bond towards the end of 2010 as part of its strategy to diversify its funding base, the bank's chief financial officer said on Thursday.

Herbert Moos told reporters: "For VTB, it is reasonable to sell no less than a benchmark bond that, for the Japanese market, means a volume of around 30 billion yen ($329 million)."

State-run VTB would also consider issuing an Islamic bond, or sukuk, to widen the range of its borrowing facilities beyond its usual Eurobond transactions.

Moos said VTB had yet to decide the exact timing of the samurai bond issue.

VTB most recently tapped the Eurobond market last July, when it sold a Eurobond issue worth a total of 750 million Swiss francs. [ID:nLV873]

(Editing by Erica Billingham)