Ukrsotsbank reports UAH 5 mln in net income in 1H11

Ukrsotsbank (UX: USCB UK) reported net income of UAH 5 mln in 1H11, according to financial results by Ukrainian Accounting Standards reported yesterday. The bank’s net income in 1H10 was UAH 17.9 mln. Total assets declined by 3.9% YTD, while gross loans were up 1% YTD. Svetlana Rekrut: We attribute Ukrsotsbank’s modest financial results to ongoing provisions accumulation, bringing its loss reserves/gross loans ratio (LLR) to 19.9% vs. 17.6% at the year beginning. NPLs rose by 4 pp q-o-q to 27%. At the same time, the bank improved its funding structure by repaying FX interbank loans (-14% YTD) and increasing retail deposits (+4% YTD).  Cost/income and NIM remained 36% and 7.2%, respectively. CAR is well above the NBU required lower bound of 10% at 15.1% at the end of the quarter.