12 April 2011, Tuesday
Today First Ukrainian International Bank announces its 2010 performance results according to the International Financial Reporting Standards (IFRS).
Financial Results
The Bank’s YE2010 profit of US$54 million – the highest ever in its history – covers the loss incurred by the Bank in the crisis year 2009.
Over the reporting period the Bank’s assets grew by 11.8% to US$2,222.2 million versus US$1,987.3 million at year-end 2009. Upon approval of its new Credit Policy FUIB resumed lending to corporate and individual clients, though the loan portfolio showed moderate growth under conditions of high credit risks in the system. The total loan portfolio grew by 0.5% to US$1,714.4 million mostly due to the corporate loan portfolio’s growth of 5.6% to US$1,293.4 million. The individual loan portfolio decreased by 12.5% to U.S.$420.9 million mainly through excess of the repayments over new loans. The Bank continued restructuring existing distressed loans to customers.
Over 2010 the FUIB’s total liabilities increased by 10.9% to US$1,787.4 million mostly through the 38.4% growth in the customer accounts: individual accounts grew by 35.1% to US$641.2 million; corporate accounts –– by 44.5% to US$364.6 million. The Eurobonds and loans from foreign banks decreased by 28.1% to US$402.6 million. The loans from the NBU declined by 28.9% to US$174.4 million. Thus, the FUIB’s liabilities’ composition improved significantly: customer accounts grew from 11.2% to 56.3%; customer loans to accounts ratio declined from 235% to 170%.
Early in the year FUIB restructured its debt to foreign creditors, establishing the precedent of a transparent, logical and consistent with the world best practice debt restructuring process in the Ukraine’s market and ensuring the optimum balance between the creditors’ and borrower’s interests.
In the second half of 2010, having obtained its foreign creditors’ agreement, FUIB initiated the process of integrating with Dongorbank. Also, in 2010 FUIB acted as a financial advisory to SCM Group delivering deal organising and structuring services in acquisition of 100% of Renaissance Capital Bank. FUIB’s successful experience in organising and structuring one of a few M&A deals in the post-crisis Ukraine’s market will facilitate further development of the bank’s investment banking business.
FUIB consciously aims at implementing the best banking business practices: in 2010 FUIB ranked second (8 positions up versus 2009) in the Transparency and Disclosure by Ukrainian Banks 2010 joint research of the Financial Initiatives Agency and Standard & Poor’s; the Bank entered Top 1000 World Banks 2010 ranking by Tier 1 capital according to The Banker.
“In 2010 First Ukrainian International Bank laid a sound foundation for further growth and achieved first significant results,” Konstantin Vaysman, Chairman of the FUIB’s Management Board, says. “The Bank made the highest ever in its history profit (UAH 235 million under Ukrainian Accounting Standards) ranking the sixth by profit among Ukrainian banks, its ROE and ROA being among the best ones in the Ukraine’s banking market (2.6% and 13.4% respectively).
In 2011 we are to focus on our customers’ needs and compliance with the international service quality standards. One of the first steps provided for by our ambitious growth strategy is FUIB and Dongorbank’s integration that will let us benefit from the synergy and economy of scale. The integrated bank’s goal is to secure its place among TOP-5 Ukraine’s financial institutions with market share not less than 5% by 2014.”
Strategy
Pursuing the goal of creating a significant foundation for further growth in 2010 the SCM Group initiated consolidation of its assets in the financial sector through FUIB and Dongorbank’s integration. The integration plan was endorsed by the National Bank of Ukraine, and the banks’ integration process is to be completed in 2011. In line with the set goals FUIB thoroughly reorganised its business structure, especially the corporate and retail business lines, in accordance with the new customer segmentation.
In the coming years FUIB will focus on the priority development of it retail business, concentrating on the middle-income and affluent retail customer segments. Also, the Bank is to build an effective and cost efficient distribution model with a standard product range aimed at the mass customer segment; develop further its transaction, Internet and mobile banking. Over short term FUIB is to start issuing unsecured loans and credit cards and resume mortgage lending.
The FUIB’s corporate business will focus on the middle (US$20-50 million revenue) and large (US$50-200 million revenue) corporate customer segments. In 2012 the Bank is to build-up its presence in the SME segment. New services implementation, including the cash management, Internet banking and factoring, alongside with further development of the Bank’s trade finance business will facilitate the Bank’s servicing of mega corporate customers (over US$200 million revenue).
The strategy provides for optimising the existing and developing new investment banking directions in order to increase the share of the fee, interest and trade income in the total income and build-up the Bank’s share in the investment banking segment. New investment banking products and services for affluent individuals and large businesses are being developed. Also, FUIB is taking measures aimed at expanding its sales channels through cross selling to both corporate and retail clients.
First Ukrainian International Bank’s financial statements were prepared under IFRS and audited by PriceWaterhouseCoopers.
