Finam increased its 12-month target price of ordinary shares VTB 14% - to $ 0.00175 per share, or $ 3.5 per GDR. Recommendation on them is reduced from hold to sell in connection with the growth of quotations. Analysts of investment company believes that the current estimate VTB does not meet the fundamental characteristics of the bank with a complex situation with overdue debt and low profitability.

In recent months, the banking sector dominated by positive trends. Significantly improve the availability of funding. Along with the resumption of a steady flow of deposits, rates on the market MBC steadily declining. Capital adequacy sector over the last year has increased from 14,5% to 18,8% and is currently almost twice the norm of the Central Bank. We also expect a steady inflow of deposits into the banking system of Russia would lead to further normalize the structure of funding, - noted in the study of Finam .

However, the risks of Russia's banks can not be considered exhausted. Despite an increasingly distinct positive signals, indicating the gradual normalization of conditions of the banking sector, we caution investors from reckless optimism. After a slowdown in May-June growth rate of arrears in July and August increased to a sufficiently high level - 10% monthly. Also We expect to increase pressure on interest margins of banks in the coming months on rising bad debts and narrowing of credit spreads - the analyst expects the investment company Finam Konstantin Romanov.

VTB for a long time will feel the impact of negative factors. Due to the aggressive credit expansion in 2007-2008 Bank was among the most affected by the crisis. The consequences (expensive liabilities and relatively low quality of loan portfolio) would have a sharply negative effect on the activity of VTB, at least in 2009-2010. We consider the recent rally of bank shares as purely speculative, not reflecting the real state of his business , - says Mr. Romanov.

In the first quarter 2009 net loss VTB was 20,5 billion rubles. In accordance with the target level of reserves at year-end 2009 to 9% of the loan portfolio (management assessment), the bank must set aside 184 billion, significantly higher than net interest income before provisions (score Finam - 136 billion rubles). Projected investment company, a net loss of VTB-up this year may be at the level of 77 billion rubles.

In addition, in the medium term the bank will maintain low interest margins. During the first quarter it fell to 4,1% from 5,1% in the corresponding period of 2008. According to our estimates, the pressure on interest margins will continue to shift to short-term sources of funding structure of VTB - the percentage of customer accounts it is less than 40%. We anticipate maintaining bank interest margins below 5% in the coming years, - says Mr. Romanov .

The main factor in Finam increase the score of Vneshtorgbank, was the outcome of placing additional issue of the bank. Evaluation of additional issue of shares under a penny at 4.82 surpassed our expectations, resulting in the amount of placement was 3.7 trillion. Shares (our forecast - 4.2 trillion.), And the state's share has shot up to 85.5%. Smearing minority share was less than expected, had a positive impact on our assessment of fair value of shares of VTB, - said Mr. Romanoff.

Department of Public Relations and Media Investment Holding Finam.
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