OREANDA-NEWS. February 11, 2010. Preliminary figures for 2009 in local accounting standards show an adequate performance in difficult market circumstances for JSC OTP Bank in Ukraine. Despite the outstandingly high total income and successful operational cost control, the financial result of the bank was hampered by the highest ever provisioning due to the undermined payment moral and capabilities of our debtors. As a consequence the financial result of JSC OTP Bank was UAH -435.3 mln at the end of 2009 according to the local financial standards.

As a result of outstanding increase in net interest (67%) as well as commission income (70%) driven by new innovations (OTPdirekt) and in spite the crisis stable, high quality customer service. Net interest came to 2.49 bln., net commission income amounts 286,08 mln., operational income before provisioning reached a level of UAH 3.0 bln by the end of 2009 - a significant 25% rise. Thanks to the strict operational cost control as well as readjusted headcount structure of the Bank the total administrative costs of the Bank amounted to UAH 1.36 bln last year.

Due to unfavourable changes in the Ukrainian macroeconomic circumstances the debtors of the Bank faced unexpected difficulties in sustaining their capacity for repayment which was reflected in worsening loan portfolio and additional provisioning. Reserves for the delinquent portfolio reached UAH 1.81 bln by the end of 2009 which is 31% higher than as of 2008.

Due to the conservative lending policy of the Bank, total assets contracted to UAH 29.4 bln during the last year. The UAH 29 bln size loan book was 8% less than in 2008 since the corporate and retail loan portfolio compressed by 9% and 7% to UAH 13.3 bln and UAH 15.7 bln respectively.

After repayment of various external obligations of the Bank, total liabilities of the institution decreased to UAH 26.56 bln.

"The universal banking model proved to be secure and stable during the financial crisis", - says Mr. Dmitry Zinkov, CEO of OTP Bank. "Traditionally liabilities are distributed between funds of corporate clients and private individuals. This meant that when private individuals withdrew money from their accounts, the inflow from corporate deposits boosted. In the fourth quarter of last year this changed: volumes on corporate accounts reduced. In fact, the explanation is that there is no crediting of the economy, but working capital is still required for running the corporate businesses. In Q2 of 2009 return of private clients’ deposits began: savings of our clientele have grown by 35% – from UAH 2.85 bln to UAH 3.85 bln. All in all, customer deposits still increased compared to year end 2008", - Mr. Zinkov added.

Thanks to additional capital increases, the total equity grew by 15% to UAH 2.84 bln in 2009 ensuring enough reserves and stability for further prudent and cautious operations for the Bank. Regulatory capital adequacy ratio of the Bank remains as high as 17.77% (by the regulatory minimum of 10%). Official current liquidity ratio (72.6%) is by far over the regulatory minimum of the National Bank of Ukraine (40%).