Ukrsotsbank (USCB) released 2Q10 UAS financials, reporting net income of US$ 2.1mn (US$ 2.2mn in 1H10). Interest-earning assets remained virtually unchanged q/q as a 3.4% q/q decline in the bank’s net loan portfolio was offset with 110% q/q growth in its portfolio of held-to-maturity securities (to US$ 266mn), which we believe is largely in government T-bills. The 2Q net interest margin gained 0.2ppts q/q to 8.1%. Operating expenses advanced 8% q/q, but prompted only a 0.4% q/q deterioration in the cost/income ratio to 35.2% in the 2Q. The bank continued to rebalance its funding base, with the share of deposits in total liabilities adding 3.9ppts q/q to 38.3%.
Vitaliy Vavryshchuk: Ukrsotsbank’s 2Q10 results are fully in-line with our expectations and FY10 forecasts. We retain our positive view on the bank and reiterate our BUY recommendation on the stock.
Ukrsotsbank 1H10 results, US$ mn
|
2Q10 |
Chg, q/q |
Chg, y/y |
1H10 |
Chg, y/y |
|
|
Net interest income |
91.9 |
2% |
-6% |
182.2 |
-7% |
|
Net fees and commissions |
15.3 |
8% |
-1% |
29.5 |
-6% |
|
Other income/loss |
1.2 |
n/m |
-90% |
-1.7 |
n/m |
|
Operating expenses |
-38.2 |
8% |
5% |
-73.7 |
-2% |
|
Pre-impairment profit |
70.2 |
6% |
-21% |
136.3 |
-24% |
|
Impairment charge for credit losses |
-68.1 |
4% |
-12% |
-133.5 |
-11% |
|
Net income |
2.1 |
970% |
110% |
2.2 |
-72% |
|
|
|||||
|
1H10 |
Chg, q/q |
Chg, YTD |
Chg, y/y |
||
|
Assets |
5,397 |
1% |
-1% |
-8% |
|
|
Corporate loans |
2,270 |
0% |
-3% |
-7% |
|
|
Retail loans |
2,596 |
-3% |
-5% |
-12% |
|
|
Loan loss reserves |
-704 |
11% |
25% |
82% |
|
|
Liabilities |
4,630 |
1% |
-1% |
-11% |
|
|
Corporate deposits |
624 |
19% |
7% |
-18% |
|
|
Retail deposits |
1,153 |
10% |
20% |
39% |
|
|
Equity |
767 |
1% |
2% |
12% |
Source: Company data, BG Capital Research
