High Q1 costs, rough market hit Sberbank stock

By Gleb Bryanski

MOSCOW (Reuters) - Russia's largest bank Sberbank (SBER03.MM: Quote, Profile, Research, Stock Buzz) reported a 16.2 percent rise in first-quarter net profit, but missed market expectations and its shares fell more than 7.5 percent on a rough day for the Russian market.

Sberbank first-quarter net profit came in at 31.1 billion roubles ($1.33 billion), it said on Friday, below analysts' average forecast of 34.64 billion roubles.

Sberbank also reported a 56 percent rise in administrative and operational rouble costs, closely watched by analysts for signs of better performance under new managers put in place by Sberbank's CEO and former economy minister German Gref.

Anton Karamzin, Sberbank's Chief Financial Officer reaffirmed cost growth guidance of 20-22 percent despite intensified inflationary pressures on the bank.

"Today is a bad day for Russian equities so any earnings miss by any company would get a negative reaction. Today is just not a good day to do that," said David Nagle, banking analyst at Renaissance Capital.

Russia's MICEX index was down 5 percent with traders citing the corporate conflict at oil firm TNK-BP and public criticism by Prime Minister Vladimir Putin of a metals firm as the cause of the bearish mood.

Many foreign investors, who hold about 28 percent of Sberbank's stock, interpreted the events as a another sign of deteriorating investment climate in Russia and growing risks.

The Russian banking sector has so far escaped the worst of the credit crunch in which global banks have declared more than $160 billion in mortgage-related losses.