MOSCOW: An economic slowdown, losses in Ukraine and a weaker rouble reduced third-quarter profits by 24 per cent at Sberbank, Russia’s biggest bank, as provisions for loan losses more than doubled.

Russia’s economy is showing signs of strain as Western sanctions over the Ukraine crisis and tumbling oil prices depress growth and many of its major banks are also nursing losses from their Ukrainian subsidiaries.

Sberbank is one of several state-controlled banks to be made the subject of sanctions that limit access to international capital markets, thereby driving up the cost of financing.

The bank said its net profit fell to 70.9 billion roubles ($1.53 billion, Dh5.56 billion) in the third quarter from 93.8 billion a year earlier and analysts said they expect the final quarter to bring further high loan loss provisions.

“A deterioration of the prospects for economic growth and a slowing in the growth of incomes of the population were key factors worsening the quality of (our) retail portfolio,” Sberbank said in a statement.

The bank said it had set aside 104.5 billion roubles in provisions for loan losses, more than twice the amount it had set aside a year earlier, and that the slide in the rouble has made it harder for clients to repay loans Sberbank had issued in foreign currency.

VTB, Russia’s second-largest bank, last week posted a 98 per cent drop in its third-quarter net profit, also stung by higher provisions, Ukraine-related risks and slowing growth.

Sberbank said the Ukraine crisis could hurt its future financial performance but it was difficult to say by how much.

The bank’s profit was shielded as its net interest income rose 17 per cent from a year earlier to 255.2 billion roubles.

“The results in general coincide with expectations — good dynamics of the main income streams and control over costs — and the main influence on profit is from provisions,” Gazprombank analyst Andrey Klapko said.

“It’s likely that the bank faces another quarter of large provisions so that it can go into next year with a cushion,” he said, adding by his calculations the bank’s return on equity in the third quarter fell to 14.3 per cent, its lowest in around four years.

Sberbank’s shares were down around 0.7 per cent after the bank reported results, slightly underperforming the Micex Index, which was down 0.3 per cent.