Ukraine Markets Daily (December 04, 2017)

Market news

  • Ukrainian banking system gained USD 80 mn of net profit for ten months since the year’s beginning

Market comment

The UX index decreased by 0.2% on Friday while the PFTS index was up by 0.1% to (in UAH terms). The WIG-Ukraine index increased by 1.2%. On the interbank exchange market, the USD/UAH was up by 0.1% to UAH 27.08 (mid price), according to Thomson Reuters. The official exchange rate reported by the NBU was UAH 27.16

 

Ukrainian banking system gained USD 80 mn of net profit for ten months since the year’s beginning

As was reported by the National Bank of Ukraine (NBU) Ukraine’s banking system gained USD 80 mn of net profit for the ten months ending October 31, 2017, as a result of financial result growth by USD 28 mn during October, with a total income of USD 5,439 mn and total expenses of USD 5,359 mn. In October 2017, system’s total revenue increased by 31.2% m/m to USD 568 mn, compared with the USD 433 mn of total income in September 2017. Particularly, banks gained USD 381 mn of interest income +1.1% compared with September 2017) and USD 142 mn of commissions income (+4.3% m/m), while its result from trading operations increased by USD 148 mn to USD 25 mn from a loss of USD 122 mn during the previous months, resulting in the total income growth. Total expenses of the banking system in October were up by 5.8% m/m to USD 540 mn, compared with USD 510 mn in September. Interest and commission expenses increased by 4.4% m/m and 1.6% m/m to USD 217 mn and USD 32 mn respectively, while other operating expenses grew to USD 42 mn (+36.8% m/m). Deductions for the reserve's creation increased by USD 10 mn (+13.2% m/m) to USD 85 mn.

Our view:

Financial results’ improvements in October 2017, compared with the results for September, are directly connected with the absence of negative results from trading operations, which reduced September’s total income by USD 122 mn, due to Ukrainian Hryvnia devaluation. However, the growth of income from other sources was slower than an increase of expenses within the banking system during October.

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