PUMB reports UAH 276 mln profit in 9M16

First Ukrainian International Bank (PUMB, PUMBUZ), the tenth largest bank by assets in Ukraine, reported UAH 276 mln in net income in 9M16, according to its IFRS-based unaudited accounts. This is much better than its results recorded in 9M15 (-UAH 714 mln), which was driven by smaller loan loss provisioning (UAH 978 mln in 9M16, – 67% yoy). As of end-September, provisions covered NPLs by 105%, according to the bank. PUMB’s net interest income fell 9% yoy to UAH 1,501 mln in 9M16, as its interest costs (-4% yoy) fell softer than interest income (-6% yoy).

The bank enjoyed an increase of its client accounts, which amounted to UAH 31.1 bln as of end-September, up 5% qoq and up 13% YTD. It had no debt to the central bank as of end-September, like a quarter before. At the same time, its lending activity was weak as its gross loan portfolio decreased 3% YTD to UAH 35.7 bln and net loan portfolio fell 4% YTD to UAH 25.3 bln. The decline was a result of allocation of more funds into government securities – the bank boosted its state bonds portfolio to UAH 4.4 bln as of end-September (from UAH 0.2 bln as of the year’s start).

PUMB’s capital adequacy ratio was 13.0% as of end-September, which is mostly in line with the level recorded as of end-June (12.9%) and at the beginning of the year (13.2%).

Alexander Paraschiy: PUMB’s results confirm our view that it is the safest bank in Ukraine’s Eurobond universe. With YTM of 11.6%, PUMBUZ bonds trade at more than a 100 bps spread to the notes of state banks, which is more a result of lesser liquidity of the private bank’s notes. Meanwhile, PUMB bonds can also serve as a benchmark for pricing the notes of related DTEK and Metinvest, which are very close to completing their long-term debt restructuring.