PUMB net loss falls to UAH 46 mln in 1H16

First Ukrainian International Bank (PUMB, PUMBUZ), the bank controlled by Rinat Akhmetov, reported a 93% yoy plunge in net losses to UAH 46 mln in 1H16. Its net interest income decreased 15% yoy to UAH 912 mln, caused by a 8% yoy fall in interest income (to UAH 2,456 mln) and 3% yoy decrease in interest costs.  Its loan loss provisioning plummeted 64% to UAH 840 mln in 1H16.

PUMB’s deposit base increased 7% YTD, or UAH 2.0 bln, to UAH 29.6 bln while all the funds raised were placed in accounts at other banks, which rose 47% YTD to UAH 6.3 bln. The bank’s net loan portfolio decreased 3% YTD to UAH 25.4 bln. Exposure to related parties of the bank slightly increased compared to the year’s start to 6.2% of loans and 18.0% of deposits as of end-June. The bank’s end-June CAR (Basel) was 12.92%, thus remaining above the 12.5% covenant on Eurobonds.

Alexander Paraschiy: The bank’s decrease in net loans and already visible reduction in interest income are clearly worrying signals. At the same time, large amounts accumulated at its accounts with other banks seem to enable it to smoothly service its external obligations, which become due very soon. Recall, the bank will start repayment of USD 19.7 mln in amortization on its Eurobond on a quarterly basis, starting September 2016. 

What’s also worrying is that the bank reported nothing on its progress on fulfilling its commitment to resolve its insufficient capital (UAH 1.28 bln, based on a stress test) by end-August and little time is left until the deadline. Interestingly, on July 29, PUMB reported it’s calling a shareholder meeting for Aug. 30, whose agenda, thus far, does not contain the question to increase its share capital. Hopefully, the question will be added to the agenda by the deadline of Aug. 19.