UPDATE 1-Moody's may turn more positive on Russian banks

* Russia banks' outlook may be raised by end-2010

* Banks seen putting 50-65 pct of revenues into provisions

* Recovery slower in Ukraine, Kazakhstan

(Adds views on other CIS states, quotes, background)

MOSCOW, July 14 (Reuters) - Moody's rating agency may raise its Russian banking sector outlook to 'stable' from 'negative' at the end of 2010, but lenders in neighbouring Kazakhstan and Ukraine will take longer to recover from the crisis.

"We will probably revise the forecast for the Russian banking system at the end of this year to 'stable'," Moody's analyst Eugene Tarzimanov told bankers on Wednesday.

"The banking system will return to stability as long as there are no new economic shocks."

The comment chimes in with expectations of an improvement in the sector -- led by state-controlled behemoths VTB (VTBR.MM) and Sberbank SBER03.MM -- towards the end of the year, as voiced by Moody's in March. [ID:nLDE62N0VO]

Russian banks have been hard hit by the global credit crunch, the worst domestic recession in 15 years and the slump in the rouble exchange rate in late 2008-early 2009.

But the sector is recovering along with the broader economy, and Tarzimanov forecast that the share of profits which banks channel into provisions this year will fall to 50-65 percent from as much as 90 percent at the height of the crisis.

Moody's sees Russian banks' provisions at 13-15 percent of their total lending portfolio by year-end. Currently, central bank data shows provisions at around 7 percent.

Prospects are also brightening for the relatively closed-off banking systems of Azerbaijan and Belarus.

"The outlook on the Belarusian banking system may be revised (up) this year, but the chances of its revision are not as for Azerbaijan," said Moody's analyst Yaroslav Sovgira.

But problems remain in Ukraine -- where non-performing loans have stopped growing but remain very high -- and, to an even greater extent, in Kazakhstan, where problem assets are seen reaching 40 percent and capital adequacy remains low.

"The revisal of Ukrainian banks' outlook is not a question for this year, more likely to 2011," Sovgira said, adding that for Kazakhstan an outlook upgrade next year would be "the best case scenario". (Reporting by Oksana Kobzeva; Writing by Toni Vorobyova; Editing by Sharon Lindores)