Financials
This report focuses on the three largest Ukrainian banks by assets, each of which have outstanding Eurobonds with maturities ranging from 2015 to 2018. Although the sharp 2014 devaluation of the hryvnia combined with a steady outflow of retail deposits has put the country’s banking system under pressure, the top three names - PrivatBank, UkrEximBank and OschadBank - could actually benefit from the situation, as both corporate and retail clients are moving their accounts from weaker to stronger financial institutions. We have no doubt that even in case of a pessimistic scenario for the Ukrainian economy in 2014-2015, the National Bank (NBU) will provide sufficient support to the troika. UkrEximBank and OschadBank are both 100% state-owned banks, while PrivatBank, controlled by pro-government oligarch Igor Kolomoyskiy, has a 24.4% share in the country’s total retail deposits and can be considered “too big to fail”. We recommend BUYing the outstanding Eurobonds of the troika with maturity
