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Ukrgasbank executes IPO


Mar 26, 2010

Expert’s opinion (Andrey Prykhodko, Project Manager)

As a part of a presale preparation of the nationalized banks, which was announced by the Vice Prime Minister S.L. Tigipko, IPO of “Ukrgasbank” on one of the Ukrainian stock exchanges should undoubtedly be considered a right move. However, in our opinion, if this placement is ever to be made in the year 2010, it will hardly be a market one. Financial sector is, without any doubt, the last in the list of priorities of the foreign investors, both portfolio and strategic, which is proved by the complete absence of any M&A activity in the branch. This does not mean that some of the portfolio investors, including western ones, cannot buy publicly traded shares of the most reliable Ukrainian banks with western capital, however the new shares are a priori more risky. Besides, Ukrgasbank indicators can just scare away any investor – net loss is 4.4 billion UAH is the highest in the branch.

As for the evaluation, Bank assets are not highly evaluated all over the world in general. Thus, the biggest bank groups Raiffeisen International Bank Holding AG and Commerzbank AG, which by the way have the affiliated structures in Ukraine are listed with a multiplier about 0.9 P/BV. The biggest Ukrainian banks, such as Ukrsotsbank and PJSC “BANK FORUM” are listed with 1.36 and 1.1 P/BV, correspondingly.

In the case of a placement per traditional multiplier P/BV the possible capitalization of Ukrgasbank will not exceed 100-120 million UAH even without discounts for multipliers of the bigger banks. The main capital of the bank (according to National Bank of Ukraine) is about 95.5 million UAH in total, this is with the authorized capital of 3.8 billion UAH. The reason of this is a substantial amount of credit loss reserves, which reaches 4.47 billion UAH – almost the half of the credits amount. Of course, 100-120 million UAH is incomparable price for a bank with assets of 12 billion UAH. However, in case the placement will still be executed it is unlikely that it will be a market one and correspondingly, have a market evaluation.

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