Oschadbank reports 2014 financials under local standards

The State Savings Bank of Ukraine (Oschadbank, OSCHAD) reported UAH 8.6 bln in net losses in 2014 in its Ukrainian accounting standards report released on Jan. 28. It attributed the loss mainly to UAH 12.2 bln in loan loss provisions. Out of the total annual loss provisions, UAH 10.2 bln was reported in the last quarter of the year. Heavy provisioning was preceded by a UAH 11.6 bln capital increase of the bank (as the government ordered in mid-November), which enabled it to increase its equity to UAH 22.7 bln as of the year end (+11% yoy). The bank’s regulatory capital increased 59% yoy to UAH 30.8 bln and 2014 CAR reached 31.4% (vs. 25.4% a year before).



The bank’s deposit portfolio increased nominally 19% yoy to UAH 55.4 bln in 2014. Local currency deposits increased 19% yoy to UAH 38.1 bln, while foreign currency deposits fell 39% yoy (in the USD equivalent, based on our estimates). Oschadbank’s lending activity increased more in 2014 as its total deposits portfolio increased nominally 34% yoy (mostly on the effect of hryvnia devaluation) to UAH 69.3 bln. Its foreign currency loans decreased 25% yoy (in USD terms) while UAH-based loans increased 27% yoy. The bank’s annual interest income increased 29% yoy to UAH 14.7 bln, while net interest income advanced 14% yoy to UAH 6.3 bln.



Oschadbank’s total foreign currency liabilities were flat yoy at USD 2.93 bln, while its total foreign currency assets fell 24% yoy to USD 2.29 bln (based on our estimates).



Alexander Paraschiy: The bank’s P&L offered few surprises as it was broadly expected that Oschadbank would increase its loan loss provisioning after it got its capital increased. The recent capital increase is a good indicator that the Ukrainian government is committed to keeping the bank as safe as possible, while international lenders to the bank should still worry about the decrease in the bank’s foreign currency assets of about USD 0.7 bln yoy. The bank’s nearest Eurobond (USD 0.7 bln) matures in 14 months, and there is still time for the bank to accumulate some liquidity for its repayment.



At the same time, a lack of real progress in political stability in Ukraine adds some pessimism that the bank will be able to accumulate dollar liquidity without state support. In turn, it’s not clear whether the government (or NBU) would be able or ready to provide dollars to the bank to ensure its smooth repayment of external debt.

Источник: Конкорд Капитал