Ukrsotsbank posts pre-tax loss of UAH 6 mln in 3Q10

Ukrsotsbank (UX: USCB UK), part of Unicredit Group, yesterday posted a pre-tax loss of UAH 6 mln in 3Q10 vs. a profit of UAH 16.7 mln in 2Q10, according to UAS. Mykyta Mykhaylychenko: The loss came on the back of accelerated NPL provisions, which reached 16% of total loans. In line with broad industry trends, Ukrsots’ net interest rate margin (4q rolling) declined to 7.2%, from 7.3% in 2Q10. It still maintained a low Cost/Income ratio, which was at 34.7% in 3Q10 (4Q rolling). We maintain a BUY recommendation on Ukrsotsbank, which is now traded at a 60%-70% discount to Eastern European peers based on P/B 2010F.