At yesterday’s AGM, Ukrsotsbank (USCB) CEO Borys Tymonkin projected 10% y/y deposit growth in 2010, with the retail segment expected to grow considerably faster than the corporate. He added the bank’s current customer base is already back to pre-crisis levels. Tymonkin acknowledged the bank remains under-provisioned and projected the LLR to gross loans ratio will reach 16% by YE10 (from 11.1% at end-2009), which yields a YE10E NPL coverage ratio of roughly 70%, according to our estimates. This corresponds with Tymonkin’s earlier guidance that Ukrsotsbank will report a small FY10 NI of about UAH 380mn (US$ 48mn), implying most of the bank’s 2010 pre-impairment profits will be allocated to loan loss reserves. Shareholders also voted to retain 2009 earnings of UAH 127mn (US$ 16mn) in the bank’s equity.

Vitaliy Vavryshchuk: Management’s FY10 guidance is fully in-line with our projections. We remain positive on Ukrsotsbank – the stock is our top banking sector pick, trading at a 2011E P/BV of 0.9-1.0, even accounting for further loan loss provisions.