OREANDA-NEWS. On 20 August 2009 was announced, that At an EGM on August 19, Bank Forum (FORM) shareholders accepted plans for the bank to increase its charter fund by 48.7% to UAH 3.4 bln via an additional share issue, but failed to approve an update to the bank's charter that could block the registration of additional share issues.

Concorde Capital: Given that amendments to the bank's charter require the consent of 75% of shareholders registered at the meeting, we believe the EGM indicates that its major shareholders (Commerzbank with 63% and Ukrainian businessman Leonid Yurushev with 26.25%) have not reached an agreement on the charter fund increase, but will probably try to do so again shortly. Possible failure to increase the bank's charter fund should not have a direct adverse effect on the bank’s equity position: as of July 1, its regulatory capital to risk-weighted assets ratio was 14% vs. the minimum requirement of 10%. In our view, the bank is still likely to redeem its Eurobonds maturing in October as scheduled, for which it will need additional support from parent Commerzbank. As for the bank's stock, failure to increase its charter fund and offer a share buyback to minorities that do not support the share issue is clearly negative. At the same time, long term the stock remains interesting as it trades currently at P/B of 0.57 and fundamentally bank Forum’s prospects are solid thanks to the backing by Commerzbank.

Concorde Capital is a full service investment bank operating on the Ukrainian, Russian and CIS markets. In 2007 Concorde Capital’s analytical team was recognized as the Top Team covering Ukraine by Thomson Extel's Pan European Survey. Senior Analyst Alexander Paraschiy was recognized as the Leading Pan-European Investment Analyst – European Emerging Markets. Concorde Capital is a leader when it comes to private placements and M&A deals. Concorde Capital’s sale of a stake in Electron Bank to Volksbank International AG was named the Best Ukrainian M&A deal of the year 2007 by the Adam Smith Institute.