Bank Aval reports losses in 1Q14 on higher provisioning and ForEx revaluation

Raiffeisen Bank Aval (BAVL UK) reported a UAH 943 mln net loss in 1Q14 vs. a UAH 84 mln profit a year before. The key contributors to the net losses were UAH 1013 bln losses related to revaluation of foreign currency (they were UAH 5 mln a year before) and UAH 868 mln loan loss provisioning (up 2.9x yoy). At the same time, the bank’s net interest income advanced 35% yoy in the quarter to UAH 1154 mln, mainly on a 35% yoy decline of interest expenses to UAH 367 mln.  

The bank’s deposit base fell 10% YTD as of end-1Q14 to UAH 23.9 bln. At the same time, its gross loan portfolio improved 10% YTD to UAH 29.7 bln – the growth is solely explained by 30% YTD increase of loans denominated in foreign currency which was purely a result of hryvnia depreciation during the quarter.