FUIB profit inches up 1% yoy in 2012

First Ukrainian International Bank (PUMBUZ) reported improved 2012 financials (under UAS) compared to 2011, despite its 4Q12 appearing weaker yoy.

In 4Q12, the bank’s net interest income decreased 18% yoy on flat interest expenses and a 9% decline in interest income. The decline was apparently driven by a cut in loan interest rates. The bank’s loan portfolio improved 5% yoy, while term deposits increased 14% yoy. Total client accounts fell 13% yoy on a 49% yoy drop in corporate call deposits. For FY12, the bank improved its net interest income 2% yoy to UAH 1.5 bln.

Despite an interest income decline in 4Q12, the bank managed to keep cost/income ratio flat qoq at 43% (vs. 49% in 4Q11), thus finding a sustainable level after a spike to 75% in 1Q12, which we attributed to extra costs incurred from its merger with Dongorbank. Stabilized costs resulted in improved cost/income for FY12 to 53% (from 54% in 9M12), while the ratio was higher than a year before (43%).

The bank posted a 28% decline in net profit for 4Q12 (to UAH 71 mln), while profit for FY12 improved 1% to UAH 271 mln. The latter was achieved by 15% yoy smaller loan loss provisions: pre-provisioning and pre-tax profit was 5% weaker yoy in 2012 (at UAH 990 mln).

The bank’s assets declined 19% yoy (by UAH 6.6 bln), driven mostly by a decrease in cash and deposits in other banks – the fall was mostly driven by a decline in call deposits and loans from other banks on the liabilities side. FUIB remained well-capitalized as its CAR increased to 17.6% as of end-2012 (vs. 15.9% a year before).