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Alfa Bank Eases Provisions, Boosting Profit

Alfa Bank, the country's biggest privately owned lender, reported a sharp rise in first-half net profits to $296 million on Friday, as provisions eased.

Russian banks have been hit hard as bad loans mushroomed when the economy suffered from the first contraction in a decade, but the sector is now quickly recovering with players such as VTB and Sberbank aiming to reach pre-crisis profits this year.

Alfa Bank, ranked among the country's top-10 lenders by assets, posted a 12 percent increase in net margin before provisions to $640 million, but its profit jumped to $296 million for the first six months of 2010 from only $6 million for the same period of 2009, the bank said on its web site.

Provisions for loan impairments decreased to $168 million from $395 million a year ago, while loans to customers added just 2 percent to $13.7 billion compared with the first six months of last year.

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