Головна сторінка
/
Новини
/

Ukrsotsbank Cost/Income surges to 64% in 2Q12

Ukrsotsbank Cost/Income surges to 64% in 2Q12

23 July 2012

Ukrsotsbank (USCB UK) posted net income of just USD 0.2 mln in 2Q12, according to data released on Friday. The bank’s net interest income declined 10% yoy in 2Q12, mainly on contraction in net loans (-6% yoy) but the decrease was to a large extent compensated by growth in net fees and commissions (+33% yoy). Nevertheless, pre-impairment profit dropped 44% yoy on surging operating expenses (+62% yoy). In line with earlier practices, the bank allocated nearly all of its pre-impairment profit to loan loss reserve. Assets remained virtually unchanged, both in quarter-on-quarter and year-on-year terms.

Ukrsotsbank’s 2Q12 and 1H12 results, USD mln

—————————————————————-
                                                    1H12   yoy  2Q12   qoq   yoy
—————————————————————-
Net interest income                        164   -9%    81   -1%  -10%
Net fees and commissions                37   25%    20   19%   33%
Operating expenses                        -110   34%   -67   55%   62%
Pre-impairment profit                       100  -29%    38  -38%  -44%
Impairment charge for credit losses  -97  -27%   -36  -40%  -43%
Net income                                      1  -14%   0.2  -42%  -50%
—————————————————————-
                                          1H12   qoq   yoy       
—————————————————————-
Assets                                5,004     -1%    0%       
 Gross corporate loans          2,363    -2%    0%       
 Gross retail loans                2,282     0%    -4%       
 Loan loss reserve                -1,073    3%    14%       
Liabilities                              4,199   -1%     0%       
 Corporate deposits                739      -7%    9%       
 Retail deposits                      1,378   -1%    6%       
Equity                                   805     -2%    -3%
—————————————————————-
Source: Company data

Olena Zuikova: The reported 62% yoy upsurge in operating expenses in 2Q12 was a negative surprise – it pushed the bank’s Cost/Income ratio to 64% from 38% in 2Q11. We aim to clarify what caused the sharp growth in costs, but anyway we doubt the bank will manage to normalize its Cost/Income back into the 35-40% range (which has been the norm for the bank for the last three years) any time soon. Another concern about the bank is low provisioning of bad loans – the bank’s loan loss reserve (LLR) reached 23% of gross loan book by end-1H12 while NPLs (loans past due by 90 days or more) are hovering at mid-30%. Overall, we do not expect the bank will return to a decent profitability level earlier than in 2015. We maintain our HOLD recommendation on the stock.

Останні новини

News

23

02/2022

Separatists may claim entire territories of two Ukrainian regions

Russia has recognized “all fundamental documents” of the self-proclaimed Donetsk and Luhansk People’s Republics (DNR...

News

23

02/2022

U.K. to provide USD 500 mln loan guarantee for Ukraine as IMF mission starts

The British government is going to provide up to USD 500 mln in loan guarantees...

News

23

02/2022

MinFin bond auction receipts jump to UAH 3.5 bln

Ukraine’s Finance Ministry raised UAH 3.3 bln and EUR 7.2 mln (the total equivalent of...