Bank Forum boosts capital by a third

At an AGM yesterday, Bank Forum (UX: FORM UK) shareholders approved of increasing the bank’s charter fund by a third to UAH 5.9 bln (~USD 745 mln). Other things being equal, this will boost Forum’s CAR (local definition) to ~39%, from 28.4% as of end-2010 (vs. the system average of 21% and minimum requirement of 10%). This, in turn, will allow the bank to realize its aggressive plans to expand lending by more than 20% during 2011 to improve profitability. Bank Forum shares are now trading at around 1.1x P/B 2011F, with close to 55% upside potential vs. Eastern-European peers.