OREANDA-NEWS. April 28, 2009.
1. What are the operating results of UkrSibbank for the 1 quarter of 2009?
As to the results of the 1 quarter of 2009 the performance of JSCIB “UkrSibbank”, incorporated in the major international group BNP Paribas, registered an excellent level of activity and operating profit, reported the press-centre of UkrSibbank.

Net interest income is UAH 744 million. If compared with the first quarter of 2008 it rose by UAH 281.5 million or 61%.

Net fee & commission income increased by 7% due to the rising number of client transactions and made up UAH 118 mln.

Total operating income for the 1Q totaled UAH 1143 million with a year-over-year increase by 2 times. Operating expenses increased quite moderately, mainly due to the inflation and devaluation of UAH exchange rate, to which the cost of services is often pegged.

As a result the operating income overtopped the figure for the 1 quarter of 2008 by almost three times and reached UAH 675.5 mln.

In spite of very complicated market situation in the country, UkrSibbank takes the lead almost in all financial and economic indicators. UkrSibbank remains listed in TOP 3 banks in Ukraine, and it is still investing to strengthen its franchise even further in its progress even in the crisis time. We have approximately 4% of market share in deposits, as there are around 150 banks operating in Ukraine. It is the result of well-coordinated work of experienced management and confidence of millions of Ukrainians.

Also, in the 1st quarter of 2009 UkrSibbank attracted more than 40 000 new customers who recognize it as one of the safest banks in Ukraine during those uncertain times.

2. How can the Bank comment on net losses of UAH 851,822,000 for the 1Q 2009?
Such losses were mainly caused by creation of provisions for retail and SME credit risks. Although the cost of provisioning is decreasing each month, its impact on financial results is still significant.

In time of economical crisis, such losses are typical for all retail banks, which are active in retail lending. UkrSibbank is the leader of mortgage market with 18% of market share. The Bank conducts transparent and conservative financial policy in view of the requirements of the NBU to form prudential reserves for credit risks, translating into accounting losses.

Dynamic creation of provisions actually started late last year, when credit defaults increased sharply. UkrSibbank policy has always been to be a prudent financial institution including its conservative approach to provisioning.

3. What is the Bank’s policy for credit risk mitigation?
First of all, UkrSibbank tries to reduce past-due accounts by restructuring its loan portfolio. This program has proved successful since the end of 2008, and many borrowers have already taken the advantage of its benefits. It is basically loan restructuring in terms of maturity (prolongation of terms loan agreement or a grace period up to half-year) and monthly payments (shifting from classic amortization schedule to annuity payments or partial payments of interests only). In addition, we propose to our customers a special program to replace a borrower – a debt is assigned to a solvent party.

The prime objective of this program is to help clients suffering from the economic crisis repay their loans. Taking into consideration current economic situation in Ukraine and being a leader in retail banking, today UkrSibbank tries to help its customers who are in real trouble.

On the other hand, the Bank actively applies debt collection and recovery procedures. We make sure there are no actual possibilities to repay a loan before initiating such procedures. When customer does not want to communicate, has no sources to repay a loan and there is no other way-out, collateral recovery procedure will be started.

Active efforts in this direction provide for future reversal of provisions.

Such situation, when provisions are created and, as a result, losses are incurred, will under no circumstances influence financial liabilities of the Bank in respect to its depositors. The Bank continues its normal operation and complies with all regulations of the NBU. The Bank doesn’t have any difficulties to repay its liabilities or any shortage of funds.

UkrSibbank has received several distinctions as best bank in Ukraine and Best Managed Bank in Ukraine in 2007 and 2008 and expects to fare as well in 2009.

4. Does the parent company BNP Paribas provides support to UkrSibbank?
UkrSibbank’s stability and safety is secured by its solid shareholders’ support, vigorous credit policy and high rating of BNP Paribas its reference shareholder. Thus, at the end of the last year Global Finance named BNP Paribas the “World Safest Bank”.

Even when rationalizing its network and operating costs, UkrSibbank is still developing and strengthening its franchise in Ukraine thanks to strategic partnership with international financial group BNP Paribas that is ready to invest in the Bank’s development. In this respect, the last General Shareholders’ Meeting has unanimously voted for the increase of authorized capital of the Bank by UAH 1.275 bn up to 5.28 billion hryvnias.

BNP Paribas Chief Operating Officer Jean-Laurent Bonnaf? stated that “Ukraine is a very long-term investment. UkrSibbank is a key bank in Ukraine, it’s a very nice operation. They are doing a very nice job. Obviously, this country is badly hit by the crisis, but there will be life after the crisis, so we do not imagine or think to work out of this market, so we are very long-term investors and most probably in the end we will have more of this bank than less of this bank. That’s is the story for this bank.”

As to the yearly results BNP Paribas is among TOP10 most profitable banks in Europe with a net profit of EUR3.1 billion in 2008. Today, BNP Paribas managers are sure that BNP Paribas operation in 2009 will also be stable and profitable.