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MOSCOW, Nov 15 (Reuters) - Sberbank, Russia's largest bank, on Wednesday beat expectations with a 64 percent jump in third-quarter net profit to a record high 224.1 billion roubles ($3.71 billion) helped by lower provisions.
That topped the 189.8 billion roubles expected by analysts in a Reuters poll on the July-September quarter.
The performance contrasts with that of Russia's banking sector which has recently been shaken by two bailouts of major lenders in the space of a month.
Sberbank shares rose 0.9 percent to 223.4 roubles as of 0732 GMT, outperforming the benchmark MICEX stock index which was down 0.6 percent.
Chief Financial Officer Alexander Morozov said results improved as a stronger economy encouraged increased lending activity.
"Sberbank surprised positively in pretty much every P&L (profit and loss) line," said Alex Kantarovich, JPMorgan's head of Russian research.
Ilya Frolov, deputy head of equity research at Promsvyazbank, said Sberbank benefited from "a visible decline in reserves against possible losses (due to bad loans) as well as thanks to a stronger-than-expected increase in net interest income on a rising loan portfolio."
Provisions against bad loans fell to 58.2 billion from 101.7 billion roubles a year earlier.
Net interest income rose to 375 billion from 342.8 billion roubles.
Higher fee income and lower interest costs also bolstered the results, Promsvyazbank's Frolov said.
Sberbank's cost-to-income ratio improved to 32 percent from 37.3 percent a year earlier, while return on equity (ROE) rose to 28.4 percent from 20.5 percent.
"Strong ROE amidst modest asset growth means faster capital accretion with increased chances of further dividend policy upgrade supporting the shares," said JPMorgan's Kantarovich.
($1 = 60.3893 roubles) (Additional reporting by Maria Kiselyova and Katya Golubkova; editing by Jack Stubbs and Jason Neely)