F&C increases share capital by 57.7% in June

F&C increases share capital by 57.7% in June



1 липня 2015 года
ICU

Finance and Credit (F&C) Bank, a top-10 largest bank in Ukraine, announced the completion of UAH1,972m share capital injection. The bank's share capital has increased to UAH5.4bn as the result of this private placement. Apart from existing shareholders, two new companies, both allegedly controlled by Mr. Zhevago, were eligible for this operation, including Bloomshine Limited, which converted part of the outstanding subordinated debt to bank shares (US108.5m). While interest payments will be decreased by up to US$8m per year as a result, there is no net liquidity inflow. In our opinion, F&C Bank currently faces two major challenges:  Very low liquidity significantly limits the bank's ability to fulfill its obligations. Despite a moderate cash-to-liabilities ratio of 7.0%, most of its cash balance seems to have restricted use. Around US$115m-US$125m of its liquidity (95%) is stored in western banks with a speculative or no rating, according to the 2014 IFRS report.  Insufficient earnings. The bank's 1Q15 net interest margin was negative (-UAH284m) while the net commission income was UAH145m. While delinquent loans are relatively low at around 10%, we believe that F&C has an excessive amount of related party loans with the interest rates that do not match the bank's cost of funding The NBU provided F&C with a two-year UAH750m stabilization loan to refinance a matured loan facility issued in 2014. The new loan's collateral included real estate and shareholders' personal sureties instead of part of the loan portfolio. This, along with the share capital increase, reinforces the shareholders' commitment to support the bank further.

Источник: ICU

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