PUMB loses 32% of its foreign currency deposits in 9M15

First Ukrainian International Bank (PUMB, PUMBUZ) reported a decline in net losses to UAH 556 mln in 9M15 (from UAH 709 mln in 1H15), according to its quarterly report under local accounting standards. The bank increased its net interest income 4% yoy to UAH 1,945 mln in 9M15, while raising loan loss provisions 66% yoy to UAH 3,165 mln. Its net commission income increased 66% yoy to UAH 1,362 mln. The bank’s capital adequacy ratio amounted to 12.5% as of end-9M15, thus remaining one of the highest in the sector. The ratio, however, decreased from 13.1% as of end-1H15 and 14.2% as of end-2014.

PUMB continued to suffer from foreign currency deposit outflow in the third quarter, although the speed of its decline slightly decreased to 7.5% qoq in 3Q15, compared to 9.5% in 2Q (and 18.8% in 1Q). Nevertheless, the 9M15 loss of foreign currency deposits amounted to 32%, which is more than in full year 2014 (-24%). The bank managed to decrease the size of its net foreign currency loans by 8.7% qoq in 3Q15 and by 26.5% YTD in 9M15. PUMB’s local currency deposit base started improving in 3Q15, rising 11.6% qoq after declines ranging between 7.7%-8.1% qoq in the preceding two quarters. Its local currency lending also started growing in the third quarter, demonstrating a 3.0% qoq advance.

Alexander Paraschiy: Thus far, the bank’s continuing foreign currency deposit outflow is our key concern. The bank, in fact, was not able to stabilize the outflow as it lost USD 273 mln in deposits over the last three quarters, or about the same amount as in the preceding three quarters. This amount looks higher than the bank was anticipating a year ago. Such outflow does not look encouraging as time is approaching for PUMB to start repaying its USD 207 mln Eurobond. Recall, the first repayment, USD 10 mln, is due in late December, and regular repayments of USD 19.7 mln per quarter will start on June 30, 2016.

At this stage, we remain optimistic about PUMB’s ability to repay the nearest bond tranches (it has about USD 0.8 bln in foreign currency assets and liabilities), and we still hope that its deposit base will start recovering in 2016, providing the economic situation continues to improve in Ukraine and no new escalation in Donbas happens. The bank will most likely be among those that will survive a planned banking system cleanup procedure being implemented by the central bank, which means PUMB’s deposit base should be growing in the future thanks to the clients of the failed banks.

Источник: Конкорд Капитал