FUIB releases positive 2011 IFRS results

First Ukrainian International Bank (PUMBUZ) released its 2011 IFRS financials yesterday – the first audited report since it merged with Dongorbank in mid-2011. Net interest income rose 16% yoy to USD 123 mln in 2011 thanks to a 13% increase in its net loan portfolio and improvement in NIM (up 0.4 pp yoy to 5.2%). Profit before provisions grew 14% yoy to USD 76 mln in 2011; however, net income declined 20% yoy to USD 6 mln against the previous year’s high base (which was boosted by a reversal in impairment charges). FUIB’s end-2011 NPLs (60+ days overdue) stood at 19% of its total loan portfolio (vs. 23% in 2010) but its NPL coverage ratio was reasonably high at 79%. Deposits surged 31% yoy to USD 2.5 bln (81% of total liabilities) in 2011, sending its loan to deposit ratio to 81%, well below the 155% average for Ukraine’s top-10 banks. Regarding the bank’s 2012 outlook, management expects FUIB’s assets and loan portfolio will grow 10-15% yoy while NIM will stay broadly flat yoy.

Olena Zuikova: We view the first audited financials for the united bank as positive – with a strong capital base (NBU CAR of 15.9%), high NPL coverage ratio and strong customer-reliant funding base, the bank is well positioned to strengthen its footing in the banking sector. The potential for further improvement in operating efficiency is also there – thanks to post-merger synergies, the bank should be able to cut its cost/income ratio (56% in 2011) in 2012.