Bank Forum Plans another Capital Injection
OREANDA-NEWS. September 14, 2010. Last week Bank Forum (UX: FORM
Concorde Capital: the upcoming capital increase should boost Forum’s CAR to approximately 39% from the current 29% (other things being equal) vs. the minimum required 10% and system average of 20%. It also further testifies the readiness of parent Commerzbank Group to support its local subsidiary (subscription price will, likely, be equal to share nominal of UAH 10, which is above current market price of UAH 7.5). Most likely, the new proceeds will replace a portion of interbank borrowings from Commerzbank (UAH 3.2 bln as of end-2Q10) and, hence, will positively impact Forum’s NII margin and will make its funding base more stable. In line with previous placements, we expect the upcoming charter fund increase will result in a further increase in Commerzbank’s stake from the current 94%. It will also make it harder for Forum to generate competitive RoE for some time going forward. The market reacted positively to the news yesterday (when most shareholders actually received the invitation to EGM) as FORM rose 8%, while UX index added 0.6%.