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.


Although the information in this report has been obtained from sources which Empire State Capital Partners believes to be reliable and was collected in good faith, we do not represent or warrant its accuracy, except with respect to information concerning Empire State Capital Partners, its subsidiaries and affiliates, either expressly or implied, and such information may be incomplete or condensed. Nor has the information and/or data been independently verified, and so is provided without further caveat regarding its reliability, suitability for commerce or specific purpose. This report does not constitute a prospectus and is not intended to provide the sole basis for an evaluation of the securities discussed herein. All estimates and opinions included in this report constitute our judgment as of the date of the report and may be subject to change without notice. Empire State Capital Partners or its affiliates may, from time to time, have a position or make a market in the securities mentioned in this report, or in derivative instruments based thereon, may solicit, perform or have performed investment banking, or other services (including acting as advisor, manager) for any company referred to in this report and may, to the extent permitted by law, have used the information herein contained, or the research or analysis upon which it is based, before its publication. Empire State Capital Partners will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission. This report is confidential and is being submitted to select recipients only. It may not be reproduced (in whole or in part) without the prior written permission of Empire State Capital Partners. Any recommendations, opinions, forecasts, estimates or views herein constitute a judgment as at the date of this report. This document has been produced independently of Empire State Capital Partners and the recommendations, forecasts, opinions, estimates, expectations, and views contained herein are entirely those of the research analyst(s). While all reasonable care has been taken to ensure that the facts presented herein are accurate and that the respective recommendations, forecasts, opinions, estimates, expectations, and views are fair and well considered, none of the research analyst(s), Empire State Capital Partners or any of its directors, managers or employees has verified the contents of this document and, accordingly, no research analyst, Empire State Capital Partners or any of its respective directors, managers or employees shall be in any way responsible for its contents.

Kind regards

Research Team