Ukreximbank releases neutral 1Q12 results

Ukreximbank (EXIMUK) reported tiny net income of USD 2.5 mln in 1Q12. Net interest income added 3% yoy even though the loan portfolio was on average down 18% yoy (but down only 2% qoq). Profit before provisions remained unchanged, and the bank kept sending it into loan loss reserve. Cost of risk increased 140 bps yoy to 7.9%. Deposits remained unchanged qoq and yoy in 1Q12.

Ukreximbank 1Q12 financials, UAS, USD mln                 

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                                                      1Q12   yoy
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Net interest income                          110    3%
Net fees and commissions                 15    3%
Operating expenses                          -33   32%
Pre-impairment profit                        109   -1%
Impairment charge for credit losses   -105   -1%
Net income                                         3   18%
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Assets                                             9,106   -4%
     Gross corporate loans                  5,210  -19%
     Gross retail loans                         70       -49%
     Loan loss reserve                        -1,335   29%
Liabilities                                         6,889   -6%
     Corporate deposits                       2,214   -2%
     Retail deposits                             1,745    5%
Equity                                              2,218    1%
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Source: Company data

Olena Zuikova: We view Ukreximbank’s 1Q12 results as broadly neutral. We expect its balance sheet will remain virtually unchanged this year and net income will stay small as operating profits will be used to offset loan losses. We expect the bank’s heightened provisioning cycle will finish by yearend. As before, we have no concerns related to the bank’s solvency and liquidity.