Despite the slight drop in its net profitability year-over-year First Ukrainian International Bank (FUIB) achieved one of the strongest financial performance results among Ukrainian banks last year. The corresponded of IA “NASH PRODUCT” was informed so by Anastasiya Tuyukova, analyst at Dragon Capital.

“Despite the slight drop in its net profitability year-over-year, the net profit under IFRS was higher than the earlier announced net profit under UAS (USD 34 million, ROE 8%) and became one of the strongest financial performance results among Ukrainian banks last year. The Loans/Deposits ratio is still above its average in the sector (93% last year). The positive performance results of FUIB are supported by enhanced quality of assets, high net interest margin and stable cost/income ratio. The Bank has rather strong equity capital (Tier I – 20%, capital adequacy ratio – 27%) and liquidity (cash and cash equivalent accounted for 22% of the assets),” marked the expert.

“In 2012 FUIB plans to build up its lending volumes by 10-15% and retain the profitability at least at its 2011 level, at the same time the bank admits that the risks of the operating environment are high because of high deposit rates and low demand for loans, alongside with a number of macroeconomic risks in the second half of 2012. The Bank continues investing in the IT support for financial services and expects to feel the effect from the “economy of scale” through consolidation with the affiliated “Dongorbank” completed last year,” said Ms Tuyukova.

We would like to remind that Fist Ukrainian International Bank, which is No 8 in terms of assets in Ukraine, published its financial statements under IFRS, inter alia announcing its net profit of

$56 million (-21% Y/Y); the return on equity was 10% (15% for 2010); the return on assets, 1.7% (2.4% for 2010). The profit before provisions grew by 14% Y/Y to $76 million. The total loan portfolio increased by 10%; the deposit base grew by 31%, as the result of which the Loans/Deposits ratio was 81% versus 113% at the end of 2010. The problem loans (60+days overdue loans) decreased to 19.1% of the loan portfolio from 23.0% last year (in absolute values the overdue debt declined by 9% Y/Y). The share of loan loss provisions in the total volume of loans decreased by 2.5 p.p. to 15.1% (the ratio of provisions to problem loans was 79%, +3 p.p.). The cost of risk ratio was low at 0.41% in 2011 (in 2010 there was release from the reserves). The net interest income grew by 16% Y/Y, and the net margin increased by 0.4 p.p. to 5.2%. The Cost/Income ratio underwent almost no change and was 56% (57% in 2010). The capital adequacy ratio (Basel) was 26.8% at the end of 2011 (+0.6 p.p. Y/Y); the Tier I capital ratio, 20.3%. The cash and cash equivalent in the balance sheet of the bank at the end of 2011 amounted to USD 802 million or 22% of the assets.

By: Vera Markova

Source: Information agency "Nash Product"