Public Joint Stock Company “State Savings Bank of Ukraine” (Oschadbank) published its IFRS Financial Statements for the year ended December 31, 2011 (audited by Deloitte & Touche)
Oschadbank delivered a considerable net profit of UAH 1.1 bn in 2011, versus UAH 0.5 bn in 2010. The redoubled net result was driven mainly by positive dynamics in interest and commission income as well as the continued decline in provision build-up pace. Thus, the Bank’s annual return on average assets (ROAA) reached 1.7%, comparing to 0.9% in 2010.
Oschadbank’s operating income before provisions totaled UAH 5.8 bn in 2011, up by 11.7% from UAH 5.2 bn in the previous year. Net interest income before provisions rose by 11.0% year-on-year and reached UAH 4.6 bn, bringing Bank’s net interest margin to 7.6 % in 2011. Net fee and commission income, driven mostly by off-balance and payment card operations, increased to UAH 1.2 bn, representing 14.0% year-on-year growth.
Operating expenses for 2011 were up by 29% and amounted to UAH 2.6 bn, reflecting Bank’s continued IT and technical development as well as marketing costs. This resulted in the cost-to-income ratio of 44% (38% a year before).
On the balance sheet side, Oschadbank enjoyed the outpacing growth as compared to the sector average. Bank’s assets expanded by 28% year-on-year to UAH 73.9 bn, led inter alia by 20% increase in loan and investment portfolio.
Essential growth of the gross loan book from UAH 49 bn in 2010 to UAH 59 bn in 2011 was defined by a range of new projects in corporate segment, focusing on the best performing sectors of economy and diversification of portfolio trough attracting private sector clients. Oschadbank’s exposure to Naftogaz remained on a decrease path making 34.6% of bank’s gross loan book at the year end 2011, down from 51.0% in 2010 and 58.1% in 2009, for account of both new lending to other clients, as well as repayments of all matured debt by Naftogaz.
Non-performing loans (NPLs), which amounted by the end of 2011 to 7.1% of the gross loan book vs. 6.6% a year before, was duly covered by loan loss provision, bringing coverage ratio to a comfortable 200%, both ratios being among the best in the banking system.
Funding from customer deposits kept on growing during 2011, totaling UAH 32.6 bn at the year end, up by 33% from UAH 24.6 at the end of 2010. Corporate deposits grew by 44% year-on-year and reached UAH 7.3 bn, while retail deposits raised by 30% to UAH 25.3 bn. Gross loans-to-deposits ratio adjusted for NBU’s refinancing stood at 138% as at year end 2011.
Oschadbank’s total equity increased in 2011 by 8.6% to UAH 17.4 bn, reflecting capital injection by the Government of Ukraine of UAH 604 million and retained earnings. Bank’s capitalization remains one of the highest in the system with capital adequacy ratio (CAR) of 30.3% and Tier 1 ratio of 26.2%.