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Concorde Capital Research: FUIB reports positive 2Q12 financials

July 23, 2012 | Cbonds

First Ukrainian International Bank (PUMBUZ) posted strong growth in key revenues in 2Q12: net income added 9% yoy, and net fees and commissions increased 15% yoy. However, the bank's total revenues were slightly down yoy due to losses related to the revaluation of securities and foreign currencies. Growth in FUIB’s operating expenses slowed to 15% yoy in 2Q12 from 95% yoy in 1Q12. The spike in costs is likely related to business restructuring following merger with Dongorbank in mid-2011. Provisions declined 23% yoy in 2Q12 as the bank brought its LLR to 17.8%, which implies an NPL coverage ratio of 97%. The lender’s assets declined 1% qoq but net loan book was up 3% qoq. Government T-bills accounted for 8.5% of total assets.

Olena Zuikova: We assess FUIB’s 2Q12 results as broadly positive – the bank clearly demonstrated its ability to contain merger-related growth in operating expenses. With NPLs provisioned almost in full, the bank should continue cutting its loan impairment charges further. FUIB’s liquidity cushion is thick enough (cash equivalents and T-bills combined make up 21% of total assets) and its solvency is strong with end-1H12 NBU CAR totaling 15.5% (vs. the minimum of 10%).

Company: Concorde Capital

Full company nameConcorde Capital
Country of riskUkraine
IndustryFinancial institutions


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