Uzbek bank decreases net profit by 12 times in 2011

Business Materials 1 June 2012 15:41 (UTC +04:00)

Uzbekistan, Tashkent, June 1 / Trend D. Azizov /

Agrobank reduced its net income by 12.4 times to 1.149 billion soums as of 2011 compared to the same period of 2010, the International Financial Reporting Standards said today.

According to the published report, the bank's assets in 2011 decreased by 2.9 percent to 1.597 trillion soums. Net loans and advances increased from 989.15 billion soums to 992.799 billion soums in the reporting period.

"Agrobank" reduced the amount of liabilities by 4.2 percent - up 1.406 trillion soums in 2011. The clients' deposits of the total liabilities hit 1.059 trillion soums, or 2.7 percent more than a year ago. The demand deposits decreased by 6.1 percent - up to 729.334 billion soums, term deposits - by 34.7 percent up to 127.73 billion soums. The amount of savings deposits increased by 51.9 per cent - up to 96.024 billion soums.

The bank's equity capital as of late 2011 amounted to 190.578 billion soums, increasing by 8.2 percent per year.

Agrobank was formed from Pakhtabank in March 2009 upon the decree of the Uzbek president. The main objectives of the bank are loans and complex banking services rendered to enterprises dealing with agricultural production, including cotton and grain processing enterprises. Agrobank is the legal successor of Pakhtabank for property, financial and other obligations.

Currently, the bank's share capital has been fully formed to the amount of 126.201 billion soums and consists of 109.24 million common and 500,000 preferred stocks with a nominal value of 1,150 soums each. Agrobank's largest shareholders are the Finance Ministry and the Uzbek Reconstruction and Development Fund. Their joint share in the authorized capital is more than 50 percent. The rest shareholders own shares of less than five percent.

The bank has 185 branches, 468 mini-banks, 189 special cash desks, 274 currency exchange offices in all of the country's regions. The bank serves nearly 270,000 legal and over a million individual customers.

Fitch Ratings downgraded the rating of sustainability of Uzbek Agrobank from the level of "b-" to "f", reflecting Fitch's view that the bank is experiencing serious financial difficulties and it needs to support by capital to restore financial stability.

The downgrade follows the publication of the financial statements of Agrobank under IFRS for the 2010 (and adjustments to accounts for 2009), where commitments have been revealed which were not previously reported, amounting to about 250 billion Uzbek soums (equivalent to 140 per cent equity under the IFRS).

Fitch Ratings has left it under supervision on Rating Watch Negative long term issuer default ratings (IDR) of Uzbek Agrobank in foreign and local currencies, which are at a level "B-" and "B" respectively

The list with a negative outlook includes also the short term IDR in national and foreign currencies which are at a level "B", Support Rating Floor "B-", support rating is affirmed at "5".

If a bank's capital is to be restored as a result of capital contributions and ,or, compensation of the problem of accounts receivable, the IDR and the levels of support for the long term means the IDR is likely to be confirmed at the current levels, Fitch said earlier.

As reported, in February 2012 Agrobank announced the beginning of placing additional shares worth 113.799 billion soum to increase its share capital by 1.9-fold up to 240 billion soum.

Official exchange rate on June 1 1871.44 soum / $1