Ukreximbank reports broadly neutral 2Q12

Обзор облигаций 18.07.2012 Ukreximbank (EXIMUK) reported net income of USD 3 mln in 2Q12. Net interest income increased 11% yoy thanks to a larger interest spread and despite a 4% yoy drop in its net loan portfolio. Profit before provisions was up 12% yoy in 2Q12 (+5% in 1H12) and the bank kept sending it to loan loss reserve almost in full. The bank’s net loan portfolio remained flat in 2Q11. Ukreximbank's 2Q12 and 1H12 results, USD mln -------------------------------------------------------------------- 1H12 yoy 2Q12 qoq yoy -------------------------------------------------------------------- Net interest income 216 7% 105 -4% 11% Net fees and commissions 30 0% 15 6% -3% Operating expenses -72 27% -39 18% 24% Pre-impairment profit 207 5% 97 -12% 12% Impairment charge for credit losses -198 5% -94 -11% 13% Net income 6 19% 3 18% 21% -------------------------------------------------------------------- 1H12 qoq yoy -------------------------------------------------------------------- Assets 9,452 4% -6% Gross corporate loans 6,287 -3% -3% Gross retail loans 112 -6% -17% Loan loss reserve -1,095 -18% -2% Liabilities 7,234 5% -8% Corporate deposits 2,217 0% -18% Retail deposits 1,775 2% 4% Equity 2,218 0% 0% -------------------------------------------------------------------- Source: Company data Olena Zuikova: The 2Q12 was neutral for the bank. As lending is unlikely to revive in the coming months and loan losses are still to be covered in full, the bank will likely stay only marginally profitable in 2H12. We do not expect any material price triggers for the issuer Eurobonds in 2H12.