Financials
An overall situation in the Ukrainian financial sector improved considerably compared to FY15 when 46 of 163 banks were declared insolvent. The regulator conducted a so called cleanup of the system which is the first phase of the sector’s reform. However, the Ukrainian banking system still suffered losses in 1Q16 due to high loan loss provisions. The share of foreigndenominated assets in total banking assets was at 49.1% as of end1Q16 at the official exchange rate of 26.22 UAH/USD. The current exchange rate of 24.90 UAH/USD means Ukrainian banks have less currency risks as strengthening hryvnia helps to provide more confidence in economic recovery in the country. In the Eavex Banking Quarterly, we provide a brief update on the sector’s performance, and publish 1Q16 and FY15 results for banks with outstanding Eurobonds. We reiterate our BUY recommendation for UkrEximBank and OschadBank outstanding Eurobonds and keep unchanged a HOLD recommendation for PrivatBank debt papers.
