Russia’s largest bank, Sberbank, is upbeat about it 9M 2008 Net Profit, with a 29% increase over 2007. But it says it's preparing for tough times ahead.

Sberbank saw a 29% year on year increase on the bottom line over the first nine months of 2008. Its Asset base, loan portfolio and customer deposits, all grew by about 20%.

The downside was an 8 fold increase in loan impairment provisions to 36 Billion Roubles – and a 16 Billion Rouble book loss on its securities portfolio.

But a 90 Billion Rouble profit – although lower than analysts forecasts – had the bank’s Deputy Board Chairman, Anton Karamzin, seeing the positive side

“Our results are within a 4% deviation and world practice considers a result to be good within a 5% deviation. In such a volatile time we consider the results as positive. Many analysts expected us to revalue our share assets, which is allowed by International Financial Reporting Standards, but we did not use that option so the result is little less than expected.”

The figures compare favourably with VTB’s $360 million third quarter loss, unveiled last week. In the face of a deteriorating environment, Sberbank says it will cut back on retail outlets and optimise the use of staff.