Ukrainian Banks

1. Investment case
2. Summary
The outlook for credit growth remains bright
Borrow abroad to lend at home
Earnings doubled
Foreign acquisitions will persist in 2007, but slow afterward
Ukrainian banks: Cheaper on strong fundamentals

3. Valuation
Comparative valuation
Gordon growth model. Raiffeisen Bank Aval
Gordon growth model. Megabank
Gordon growth model. Bank Forum
Gordon growth model. Faktorial Bank
Gordon growth model. Ukrsotsbank
Gordon growth model. Ukrinbank
Gordon growth model. Rodovid
Gordon growth model. Ukrgazbank

4. Sector overview
How much growth is ahead?
2006: Another banner year with robust growth
Deeper penetration, But still plenty of room
Mortgages: The new center of gravity
Foreigners lead the segment
Recent legislative initiatives will support the market
Financing the growth
Deposits: low penetration & growing Loan/Deposit ratio
Borrow abroad, lend at home
Ongoing need to boost capital base
Earnings doubled
More retail lifts net interest income
Entrance of foreign players enhances transparency
ROE On The Rise
Intense M&A activity to persist in 2007
Acquisition Fever
Ukrainian banks: How much for sale?

5. Company profiles

5.1 Factorial Bank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.2 Forum
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart
Khreschatyk Bank
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.3 Megabank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.4 Nadra Bank
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.5 Raiffeisen Bank Aval
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.6 Rodovid Bank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.7 Ukrgazbank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.8 Ukrinbank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

5.9 Ukrsotsbank
INVESTMENT CASE
SHARE PRICE PSRFORMANCE - chart
MARKET INFORMATION - table
STOCK OWNERSHIP - table
MARKET MULTIPLES - table
KEY RATIO - table
Growth Rates - chart

6. Appendices
Appendix 1
Appendix 2
Appendix 3

CHARTS

Performance YTD
Ukr. bank index vs. PFTS & MSCI EM banks
Upsides and recommendations
ROE: Ukrainian Banks Aggregate
P/B and Book Value growth
P/E and Earnings growth
Asset growth, % yoy
Loan portfolio growth, % yoy
Deposit growth, % yoy
Equity growth, % yoy
Lending vs. GDP Growth
Loan/GDP Evolution in 2001-06
Average "add" to Loan/GDP, 2001-06
Mortgage loans, USD bln
Mortgage/Total loans, %
Mortgage lending penetration, 2006
Residential housing construction
Apartment prices in Kyiv, USD/sq. m
Mortgage & term deposit interest rate
Ukraine's key mortgage lenders*
Mortgage & retail deposits growth
Deposit/GDP, 2006
Ukraine's Loan/Deposit ratio
Ukrainian banks' foreign borrowing*, USD mln
Ukrainian banks: Syndicated loans
Eurobond placements
Equity and asset growth
Sector's capital adequacy ratio
Retail loans
NIM & average interest lending rate
Net income & share capital growth, % yoy
ROE and Return on Share capital
Main contributors to equity growth in 2006
Assets available for further acquisition

TABLES

Comparative valuation
Raiffeisen Bank Aval - Key model assumptions, UAH mln
Raiffeisen Bank Aval - Valuation summary
Raiffeisen Bank Aval - Sensitivity analysis: Share price, USD

Megabank - Key model assumptions
Megabank - Valuation summary
Megabank - Sensitivity analysis: Share price, USD

Bank Forum - Key model assumptions
Bank Forum - Valuation summary
Bank Forum - Sensitivity analysis: Share price, USD

Faktorial Bank - Key model assumptions
Faktorial Bank - Valuation summary
Faktorial Bank - Sensitivity analysis: Share price, USD

Ukrsotsbank - Key model assumptions
Ukrsotsbank - Valuation summary
Ukrsotsbank - Sensitivity analysis: Share price, USD

Ukrinbank - Key model assumptions
Ukrinbank - Valuation summary
Ukrinbank - Sensitivity analysis: Share price, USD

Rodovid - Key model assumptions
Rodovid - Valuation summary
Rodovid - Sensitivity analysis: Share price, USD

Ukrgazbank - Key model assumptions
Ukrgazbank - Valuation summary
Ukrgazbank - Sensitivity analysis: Share price, USD

Ukrainian banking: Key forecasts
M&A Deals in the Ukrainian banking sector
Private placements in the Ukrainian banking sector
Foreign ownership penetration assumptions
The most likely takeover candidates in 2007
Factorial Bank - Income statement summary, USD mln
Factorial Bank - Balance sheet summary, USD mln
Forum - Income statement summary, USD mln
Forum - Balance sheet summary, USD mln
Khreschatyk Bank - Income statement summary, USD mln
Khreschatyk Bank - Balance sheet summary, USD mln
Megabank - Income statement summary, USD mln
Megabank - Balance sheet summary, USD mln
Nadra Bank - Income statement summary, USD mln
Nadra Bank - Balance sheet summary, USD mln
Raiffeisen Bank Aval - Income statement summary, USD mln
Raiffeisen Bank Aval - Balance sheet summary, USD mln
Rodovid Bank - Income statement summary, USD mln
Rodovid Bank - Balance sheet summary, USD mln
Ukrgazbank - Income statement summary, USD mln
Ukrgazbank - Balance sheet summary, USD mln
Ukrinbank - Income statement summary, USD mln
Ukrinbank - Balance sheet summary, USD mln
Ukrsotsbank - Income statement summary, USD mln
Ukrsotsbank - Balance sheet summary, USD mln

Ukraine's Top-60 banks: Balance sheet summary
Ukraine's Top-60 banks: Income statement summary
Ukrainian banking sector evolution