Business news from Ukraine

STATE-OWNED UKREXIMBANK SEES MORE THAN UAH 2 BLN OF NET LOSS IN Q1

The net loss of Ukreximbank (Kyiv) amounted to UAH 2.07 billion in January-March 2020, while for the same period in 2019 the bank declared UAH 395.32 million in profit, the bank said in the quarterly financial statements released on its website.
According to the statements, the bank’s net interest income amounted to UAH 325.99 million for the first quarter, which is 9.7% more than for the first quarter of 2019, while the net profit from investments in securities increased by 40.6 times, to UAH 2.44 billion.
The bank lost UAH 4.3 billion on differences in rates, while it earned UAH 407.74 million in the same period in 2019.
The bank’s assets increased by 6.9%, to UAH 150 billion, including loans to customers by 7.9%, to UAH 57.5 billion for the reporting period.
The bank’s liabilities increased by 10.8%, to UAH 145.58 billion, including customer deposits by 12.2%, to UAH 86.54 billion.
The bank’s net worth halved to UAH 4.5 billion. Ukreximbank’s charter capital remained at the level of UAH 38.73 billion.
According to the National Bank of Ukraine, as of January 1, 2020 Ukreximbank ranked third among 75 banks operating in the country in terms of total assets (UAH 202.92 billion).
Ukreximbank, the sole owner of which is the state, was created in 1992.

UKREXIMBANK’S NET PROFIT IN 2019 13.4 TIMES LESS THAN IN 2018

The net profit of Ukreximbank (Kyiv) in 2019 amounted to UAH 63.62 million, which is 13.4 times less than in 2018 (UAH 852.30 million), according to the bank’s report on the website.
According to the report, in the fourth quarter of 2019, the net loss of Ukreximbank amounted to UAH 2.21 billion, while in 2018 the bank declared a profit of UAH 146.06 million for this period.
One of the reasons for the decrease in profit in 2019 was a decrease in the bank’s interest income by 7%, to UAH 1.77 billion, which is associated with a decrease in the loan portfolio by 3%, to UAH 7.24 billion and the securities portfolio by 14%, to UAH 3.57 billion.
In terms of non-interest income, there was an increase in net commission income by 4%, to UAH 652.24 million. This partially offset the decrease in other incomes by almost 2 times, to UAH 105.09 million, due to a lack of one-time and irregular receipts.
In addition, the loss in the fourth quarter of last year and the decrease in profit in general for 2019 are explained by an increase in expected credit losses to UAH 3.039 billion from UAH 1.14 billion for three quarters, while in 2018 the bank, on the contrary, received an additional UAH 1.64 billion.
The bank’s assets in 2019 decreased by 13.2%, to UAH 140.34 billion, in particular loans to customers by 26.5%, to UAH 53.28 billion.
The bank’s liabilities decreased by 14.2%, to UAH 131.43 billion, in particular, debt to customers by 6.1%, to UAH 77.13 billion.
Ukreximbank’s net worth for 2019 rose by 5.5%, to UAH 8.90 billion.
The charter capital of the bank remained at the level of UAH 38.73 billion.

STATE-RUN UKREXIMBANK AND UKRAVTODOR SIGN AGREEMENT ON FIRST TRANCHE OF UAH 5.782 BLN FOR UPDATING ROADS

JSC Ukreximbank and the State Agency of Automobile Roads of Ukraine (Ukravtodor) with the participation of President of Ukraine Volodymyr Zelensky have signed an agreement to provide the first tranche for updating roads in Ukraine in the amount of UAH 5.782 billion from the amount of financing, which will total UAH 19.3 billion.
“Despite the quarantine measures in our country, the most important thing is that the state works and, together with the banking sector and construction companies, builds kilometers of roads and “sews” our country! As I said, roads, bridges are a priority,” Zelensky said after the signing of the agreement.
He emphasized that the Big Construction program is the image of Ukraine as a country with modern and high-quality roads on which you can travel. The president also noted that the program will contribute to the creation of new jobs.
The president’s press service notes that the attraction of funds from Ukreximbank under state guarantees by Ukravtodor became possible due to the adoption of laws on amendments to the budget that Zelensky signed on February 4, 2020, and thanks to the decision of the National Bank to lower the refinancing rate. The loan interest rate will be 10.5% per annum.
“We, as a state bank, support the Big Construction project. With the signing of the agreement, Ukravtodor will receive the first tranche in the amount of UAH 5.782 billion at a rate of 10.5% per annum, which is 2% lower than the Cabinet of Ministers foresaw,” chairman of the board of Ukreximbank Yevhen Metsger said.
He said that Ukreximbank is ready to become a financial partner of the Big Construction project and lend its shoulder to all companies, in particular contractors, that will be involved in the construction of the facilities under this program.

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STATE-RUN UKREXIMBANK MULLING PURCHASE OF ITS EUROBONDS FROM MARKET

State-owned Ukreximbank (Kyiv) is considering a scenario to repurchase its eurobonds from the market with their replacement with cheaper and longer-term resources, chairman of the financial institution Yevhen Metsger has said.
“As one of the working scenarios, the repurchase of our eurobonds from the market is considered, the rate at which is about 10% in dollars, and replacing them with cheaper and longer-term resources from the International Monetary Fund, he said.
In addition, Metsger said that the bank is holding a dialogue on additional capitalization with the Finance Ministry as a representative of the owner and with the National Bank of Ukraine (NBU).
“Formally, the management will first discuss the situation and forecast of activities with the supervisory board, then ask it to apply for additional capitalization to the government. For the entire cycle, we assume that it will take us time until the end of the second quarter,” he said.
The chairman of the board of Ukreximbank said that the bank needs additional capital to enable it to develop.
He said that without additional capital, the bank will also not be able to provide the necessary support during a pandemic to a number of clients and key sectors of the economy.
“To rely on itself, make a profit, then invest it in net worth is a long way to go, given that the bank’s financial results for 2019 do not allow to reinvest profits in capital. Our former management declared over UAH 600 million of income. However, in reality, I am afraid that we will get a much more modest figure,” the banker said.
According to him, the bank now has quite negative dynamics in operating income, resulting in, there is no way to quickly accumulate financial results to cover one-time effects, and it will take time for the new management team to reproduce the working business model and reverse the trend.
https://ucap.io/

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MCKINSEY TO ADVISE UKREXIMBANK ON STRATEGY

PJSC State Export-Import Bank (Ukreximbank, Kyiv) and McKinsey and Co. Ukraine LLC on December 16, 2019 signed an agreement on advising regarding the drafting of the bank’s development strategy for 2019-2023, according to information in the ProZorro e-procurement platform.
The price of the services, which according to the documentation must be provided before December 31, 2021, is EUR 960,000. The cost of advising services for developing the strategy, in particular, is EUR 84,000, and if the bank’s supervisory board approves the strategy developed by the company, the amount will increase by another EUR 120,000.
Ukreximbank, the sole owner of which is the state, was created in 1992. The net profit of the financial institution in January-September 2019 amounted to UAH 2.27 billion, which is 2.2 times more than in the same period in 2018 (UAH 706.24 million).
According to the National Bank of Ukraine, as of October 1, 2019, the bank ranked third among 76 banks operating in the country in terms of total assets (UAH 205.439 billion).

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KIEV-BASED STATE BANK UKREXIMBANK ANNOUNCES COMPETITION FOR POSITION OF BOARD CHAIRMAN

The supervisory board of Kyiv-based state bank Ukreximbank has announced a competition to select a candidate for the position of board chairman and hired international recruitment company Odgers Berndtson, the Finance Ministry of Ukraine reported on its website.
According to the statement, the supervisory board approved this decision on November 15. Applications from candidates will be accepted from November 18 until December 2, 2019. On December 3, the bank’s nomination and remuneration committee in cooperation with Odgers Berndtson will form a list of not more than 10 candidates admitted to the next stage of the competition. On December 4-6, interview with the candidates will be held after which three candidates will be admitted to the final stage of the competition.
On December 6, the final stage of the competition will be held.
A candidate for the position must have at least five years of experience in the financial sector in total, including at least three years on senior managerial positions as well as have impeccable business reputation.
As reported, on November 16, 2019, the Security Service of Ukraine acting in charge of the Prosecutor General’s Office of Ukraine (PGO) detained Board Chairman of Ukreximbank Oleksandr Hrytsenko in the framework of a criminal proceeding on the grounds of committing crimes under Part 1 of Article 255 (creation of a criminal organization), Part 5 of Article 191 (misappropriation, embezzlement of property or possession by abuse of office), Part 3 of Article 209 (legalization (laundering) of proceeds of crime).
Pechersky District Court of Kyiv chose a measure of restraint to Hrytsenko in the form of a UAH 3 million bail without keeping in custody.
According to the PGO, Hrytsenko is under investigation into case No. 12013220540000400 dated January 31, 2013, for being a part of a criminal organization, created by former President of Ukraine Viktor Yanukovych and his companions in February 2010, and is charged with assistance in lifting seizures from deposits and collateral for a $160 million loan for the purchase of the Ukrainian Media Holding.
Hrytsenko was appointed as Board Chairman of Ukreximbank in August 2014.
Ukreximbank, the sole owner of which is the state, was created in 1992. According to the National Bank of Ukraine, as of October 1, 2019, in terms of total assets (UAH 205.439 billion), the bank was third among 76 banks operating in the country.

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