UPDATE 1-RESEARCH ALERT-Analysts upgrade Canadian Western Bank

June 5 (Reuters) - At least two brokerages upgraded Canadian Western Bank (CWB.TO), citing improved credit quality and margin expansion outlook for the bank.

On Thursday, Canadian Western Bank reported a 15 percent fall in quarterly profit, but said margin improvement was seen in the latter part of the second quarter and it expected that trend to continue through 2009. [ID:nN04187867]

Dundee Capital Markets upgraded the bank to "neutral" from "sell" and said it expects the regional banks to perform much stronger than the "Big 5" over the next 12 months.

"We believe that margins are likely to experience expansion over the coming quarters," the brokerage said.

It also raised its price target on the stock to C$15 from C$12.50.

BMO Capital Markets upgraded Canadian Western to "outperform" from "market perform," saying that while credit would continue to challenge the bank in coming quarters, the bank should be able to move spreads higher in 2010.

The brokerage also raised its price target on the stock to C$17 from C$10.50.

Genuity Capital Markets raised its price target on the stock to C$19 from C$18, saying it was comforted by the bank's benign credit trends to date and a much improved outlook for margin expansion.

Shares of the Edmonton, Alberta-based bank were up 83 cents to $15.52 Friday on the Toronto Stock Exchange. (Reporting by Swaha Sircar in Bangalore; Editing by Jarshad Kakkrakandy)