Ukreximbank reports neutral 2011 IFRS financials

Ukreximbank (EXIMUK) posted low 2011 net income of USD 16 mln, according 2011 IFRS financials released yesterday. The bank’s net interest income surged 21% yoy while non-interest income declined 27% mainly on last year’s high base due to a one-off profit item. Operating expenses grew 24% yoy, pushing Cost/Income ratio 3 pp higher to 24%. The bank set aside 94% of its operating profit to loan loss reserve, taking end-2011 LLR/Gross Loans ratio up 4.2 pp yoy to 18.5%. Past due or individually impaired loans stood at 23% at end-2011 vs. 20% in 2010.

Ukreximbank 2011 financials, IFRS, USD mln                       

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                                2011  yoy
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Net interest income    396  21%
Revenue                    511   9%
Operating expenses    -124  24%
Loan loss provisions  -364   8%
Net income               16   4%
Assets                      9,327   3%
Net loans                  5,238  -5%
Customer accounts    3,714   6%
Equity                      2,160   1%
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Source: Company data

Olena Zuikova: We view Ukreximbank’s 2011 results as neutral and do not expect a major turnaround this year: lending is likely to remain very weak and the bank will continue allocating almost all of its operating profit to loan loss reserve. We nevertheless have no concerns about the bank’s liquidity and solvency. Additionally, we remain confident Ukreximbank will keep getting support from the government and the NBU if needed.