Bank Forum’s Net Income up 89% yoy in 2007

According to Interfax, Forum Bank (FORM: BUY) increased its net income by 89% yoy to USD 10.4 mln in 2007. The bank’s net assets grew 95.4% yoy to USD 2.9 bln in 2007, the loan portfolio increased by 89% yoy to USD 1.9 bln and equity climbed 76% yoy to USD 266 mln. Currently, the bank has 301 branches and is the tenth largest bank in Ukraine in terms of assets, as of Dec. 1, 2007. Alexander Viktorov: The bank’s 2007 net income was only 2% off from our forecast, while balance sheet growth was on average 10% higher than we expected. Forum also reached its targets for network expansion, increasing its branches 55% yoy. This year we expect that Commerzbank-acquisition positives will be realized following conclusion of the takeover; Forum will continue its progress in improving efficiency and benefit from exposure to cheaper foreign borrowing. We forecast the bank to have another strong year in 2008: its net income to double and balance sheet to expand about 70%. We maintain our BUY recommendation.