Results’ releases

Joint Stock Company the State Export-Import Bank of Ukraine (JSC Ukreximbank) has published its interim condensed consolidated financial statements as reviewed by the Bank’s independent auditors for the six months ended 30 June 2011.

During the first six months of 2011, Ukreximbank supported by the strongest capital base in the system maintained its cautious growth strategy, which is reflected in the increased volume of operations and an increase in profitability compared to the corresponding period in 2010 with profit before income tax expense for 1H2011 of UAH93 million. The Bank’s prospects for the full year ending 31 December 2011 remain in line with its expectations.

Net interest income before allowance for impairment of UAH1,390 million reflected a 4.3 per cent. YoY increase of interest income mainly due to an increase in the portfolio of low risk state bonds.

Net fees and commission income increased by 7.1 per cent. YoY to UAH175 million as a result of the Bank’s overall growth in the volume of cash and settlement operations.

In 1H2011, total assets increased by 9.9 per cent. amounting to UAH78,983 million. The Bank’s cautious growth strategy is reflected in the assets dynamics, with asset growth primarily in cash and cash equivalents and in amounts due from credit institutions.

Cash and cash equivalents grew by 39.4 per cent. YTD to UAH15,189 million as at 30 June 2011 with amounts on current accounts with other credit institutions increasing to UAH7,858 million at end-1H2011 from UAH4,729 million at end-2010 and NBU deposit certificates with up to 90 days-tenor increasing to UAH1,801 million. The strong liquidity position of the Bank places the Bank in a favourable position to develop a pipeline of high quality projects and the flexibility to deploy these projects when the Bank concludes that the global environment is conducive to such asset growth strategy.

Amounts due from credit institutions increased to UAH3,562 million as at 30 June 2011.

Net loans to customers were marginally lower at UAH42,851 million as the Bank maintained its conservative strategy in the light of the market uncertainty. The Bank however maintains its commitment to long standing clients and the implementation of a development strategy in the Bank’s priority economic sectors.

Investment securities grew by 4.4 per cent. YTD during the reporting period to UAH11,179 million which included UAH6,7 billion of highly liquid government securities.

As at 30 June 2011, allowance for loan impairment as a percentage of total loan portfolio increased to 16.8 per cent. from 14.3 per cent. as at 31 December 2010, reflecting the Bank’s conservative policy on loan loss provisions.

Liability growth was fuelled mainly by a strong inflow of customer time deposits and increased Eurobond issuance. Total liabilities rose by 12.6 per cent. YTD to UAH61,706 million in 1H2011 with amounts due to customers rising by 19.5 per cent. to UAH33,244 million and Eurobonds issued by 21.1 per cent. to UAH14,281 million.

Encouraging 63.9 per cent of the increase in Amounts due to customers was comprised by time deposits. As at 30 June 2011, the share of amounts due to customers constituted 53.9 per cent. of the Bank’s total liabilities. The amounts due to private individuals accounted for 41.0 per cent. of the aggregate amounts due to customers.

Amounts due to credit institutions fell by 14.3 per cent. to UAH6,324 million, reflecting the repayment of maturing bilateral loans to international banks and international financial organisations.

In February 2011, the Bank issued 3-year Euroclearable notes denominated in the Ukrainian hryvnia in the amount of UAH2,385.1 million (equiv.USD 302 million). The transaction was the first ever international UAH issuance by a Ukrainian bank or corporate providing a new source of funding to address the demand for long term hryvnia from the real sector of the Ukrainian economy. In establishing a benchmark in the international capital markets, the Bank believes it has paved the way for similar issuance by high quality Ukrainian borrowers, and thereby further increases the depth of term funding to the Ukraine economy.

In February 2011, the Bank had a further modest increase in its authorized share capital as the Ukrainian Government approved an increase in the authorised share capital of the Bank through a capitalisation of a part of the Bank’s 2009 profit, increasing the Bank’s authorised share capital by UAH20 million to UAH17,127 million (based on IAS 29).