Aval reports weak 2Q12 results



25 июля 2012 года
Конкорд Капитал

Рекомендация: BAVL, Райффайзен Банк Аваль, — держать


Raiffeisen Bank Aval (BAVL UK) reported tiny net income of USD 0.7 mln as it kept allocating nearly all of its pre-impairment profit (which declined 28% yoy in 2Q12 and 15% yoy in 1H12) to loan loss reserve. Aval’s net interest income was down 7% yoy in 2Q12 as its net loan book contracted 6% qoq and 12% yoy. The decline in net interest revenues was only partly offset with stronger net fees and commissions (+9% yoy).

Raiffeisen Bank Aval's 2Q12 and 1H12 results, USD mln
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1H12 yoy 2Q12 qoq yoy
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Net interest income 395 -5% 191 -6% -7%
Net fees and commissions 82 12% 43 10% 9%
Operating expenses -206 13% -110 15% 18%
Pre-impairment profit 136 -15% 54 -33% -28%
Impairment charge for credit losses -128 -16% -49 -38% -29%
Net income 2 8% 1 -49% -59%
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1H12 qoq yoy
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Assets 5,940 -7% -14%
Gross corporate loans 2,653 -6% -6%
Gross retail loans 2,047 -2% -24%
Loan loss reserve -1,263 0% -23%
Liabilities 5,142 -7% -16%
Corporate deposits 1,470 -9% -12%
Retail deposits 1,972 2% -4%
Equity 798 -1% -1%
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Source: Company data

Olena Zuikova: The key concerns about Aval’s 2Q12 financials is continued rapid declines in assets and net loan book. Growth in operating expenses against weaker revenues is also a disappointment – the bank’s Cost/Income was up from 55% in 2Q11 to 67% in 2Q12. We expect the bank will report a nearly zero bottom line under UAS, but its net income under IFRS should be much stronger, with ROE expected to be near 10% with the discrepancy mainly attributed to different provisioning policies. We maintain a HOLD recommendation on the stock as the bank is facing risks of further contraction in its balance sheet and a related decline in revenue.

Источник: Конкорд Капитал

Аналитик: Алёна Зуйкова


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