Все комментарии из этого раздела на дату:

Искать в комментариях:

Например: Сити брок

Banking Sector Insight (eng)

09.12.2014 | Источник: ICU
Тема: Обзоры по компаниям и отраслям, ICU, Инвестиционный Капитал Украина

Our banking sector quarterly update focuses on the most recent financial data on banks - in this case, for 3Q14 - and discusses the latest developments in the sector as well as in the economy. In a nutshell, it contains the following viewpoints:

Vicious circle of lacking confidence. There is a significant lack of confidence in Ukrainian banks owing to their inability to satisfy creditors' claims in time magnified by the constant devaluation expectations and fears of bank's insolvency. Moreover, banks continue to experience a liquidity drain, which in itself complicates bank payments. The key issue is to pave the way to stability - namely, by ensuring that a number of large financial institutions have both sufficient capital and liquidity support from both shareholders and the regulator. Currently, the regular is in the process of identifying viable banks and looking for the means with which to support such banks as well as cover the losses of insolvent financial institutions. For confidence in the banks to return, some positive development - such as the restoration of creditor rights in a high-profile case - is equally necessary.

Deposits exodus. Another wave of deposits outflows was triggered by the intensification of warfare in late summer 2014 and expectations of the further devaluation of the hryvnia. FX deposits have been hit hardest owing to the restrictions on FX withdrawals, which caused panic among some clients. In total, during the first 10 months of 2014, Ukraine's banks lost 26.0% of retail deposits but just 4.1% of corporate deposits adjusted for UAH devaluation.

In our view, most deposits withdrawn from the banking system have been transferred to vaults rather than spent on real estate or cars. Therefore, deposit funding has a significant growth potential. However, the reversal of the deposits outflow can be expected only after devaluation expectations have receded and the delayed FX demand has been met.

In the meantime, the regulator has announced tentative plans to ease existing constraints. It recently announced that there will be no limits on withdrawals for registered certificates of deposits. Although this measure discriminates somewhat against existing depositors, we believe it is likely to facilitate the return of depositor confidence.

Capital inflows required. The National Bank of Ukraine (NBU)'s 2014 stress test of the largest 35 banks, which, combined, account for around three-quarters of the Ukrainian banking system, was carried out in order to identify the most problematic. The total required capital amounts to UAH66bn (which is the equivalent of 45% of existing regulatory capital). It is generally understood that the terms of this year's test were overoptimistic as regards both the implied UAH exchange rate and the recoverability of assets in the annexed territories. According to our estimates, which are based on an adverse scenario, the total amount of required capital is up to UAH134bn for the 35 largest banks or up to UAH170bn for the whole system. We identify the following types of bank by capitalization requirements as stipulated in the results of the 2014 stress test:

Foreign bans, which include VTB Bank, Prominvestbank and Ukrsotsbank, require UAH20.5bn of additional capital (our estimates stays at UAH49.7bn). That sum can be raised relatively easily by converting debt into equity. While foreign investors still have to be convinced about positive changes in economic conditions, such as the new pro-reform economic policy team, the solvency of these banks is beyond reasonable doubt.

State-owned bans, which need to be capitalized by UAH12.5bn. In our opinion, this is an adequate estimate of the capital required. The authorities are likely to provide the total amount of required capital during the upcoming three months. However, that amount may be revised in order to boost these banks' lending ability.

Large Ukrainian banks, which are UAH23.5bn short of capital (our estimates stays at UAH49.7bn). Some of these banks are backed by industrial groups like SCM, Ferrexpo, Privat who have capabilities to support their equity. In case of fast and adequate position by authorities, recapitalization of these institutions might be provided without taxpayers' money. The rest of the Group (Delta and Nadra), controlled by shareholders who are limited in financing and/or capabilities (motivation). This bank might be the first in the chain for taxpayers' money in amount of up to of UAH11.0bn by our estimated.

Mid-size bans, which need UAH10bn of capital (same under our estimates). In our opinion some of this bank (with foreign capital) may capitalize themselves, when others may be merged with larger financial institutions rather than being nationalised if their shareholders are unable to provide the necessary support. All in all the real money need from the state might be insignificant.

If case authorities are capable to move fast, be proactive and provide efficient motivation for investors to recapitalise the banks, the total cost of saving the Ukrainian banking system would decline to UAH40-50bn, which the state would likely be able to bear.

Nationalisation in the offing? So far in 2014, temporary administration has been introduced at 32 banks, which jointly account for more than 10% of the Ukrainian banking sector in terms of retail deposits. To date, VAB is the largest institution to have been declared insolvent: insured deposits at the bank total UAH7.1bn. Despite its large share of overall retail deposits (UAH10bn or 2.5% of the total), the authorities have refrained so far from nationalising the bank owing to the very significant share of related-party lending.

Given that there are currently several potentially insolvent large banks in the market, we predict the nationalisation of some systemically important financial institutions. The key criteria for nationalising will be whether the target bank has a viable business model and whether it is not crucially dependent on shareholder businesses.

The authorities still have tough decisions to make and the Ukrainian banking sector expects them to do so quickly. In our view, they will act by the end of 1Q15, otherwise there is a danger of perpetuating the vicious circle of lacking confidence described above.

 Скачать полный обзор »

Комментарии по теме