Latest developments and financial performance
In Q4’14 the bank managed to restore its retail deposits to March-14 pre-bank run level of BGN 5.5bn by attracting BGN 600m. But
corporate accounts still stood quite lower at BGN 1bn vs. BGN 2bn before the Corpbank case triggered a run on Fibank. In
November, the bank repaid BGN 300m from the BGN 1.2bn state aid, provided last year. The remaining BGN 900m would be repaid
until May 2016 under a plan approved by the EC.
FY 2014, the net interest income increased to BGN 276m (+70% YoY), interest revenue jumped 12.8% YoY, while interest expenses
sank to BGN 227m (-20% YoY). Net fees&commissions fell 4.7% YoY to BGN 81.4m and TOI reached BGN 384.7m (+49% YoY).
Loan impairment charges read BGN 292m for 2014, up almost 5-fold on an annual basis. The cost of risk was up to 471bps from
126bps in 2013. However, BGN 160m revenue from sale of repossessed assets helped the bottom line. Hence, 2014 net profit
resulted in BGN 30.5m (+17.8% YoY). The loan portfolio fell by 2.6% QoQ to BGN 5.7bn (-4.7% YoY), L/D ratio stood at 88%. The
level of liquid assets to total liabilities improved to 28.2% at end-2014 from 23.2% at the end of September’14.
Valuation and performance rationale
We prepared detailed forecasts for Fibank until 2019, which include repayment of the state aid by 2016 and increase in other funding
sources by a CAGR of 1.9% until 2019, as the bank attracts more retail deposits but taps also the non-deposit market. We project a
slight decline in the cost of funding to 2.7% from 2.9% currently, reflecting lower deposit costs, which is the underlying trend in the
sector as well. The net interest margin is seen to converge towards 3.7% from 4.2% in 2014 as competition pressure weighs on loan
rates, while loans/assets ratio fluctuates around current 66% due to the subdued lending environment, which would prevail at least in
the next 2 years. Forecasted CAGR of net loans for 2014-2019 is 1.3%. We model in continuing elevated level of impairment charges
with cost of risk at average 1.8% for the forecast period, while coverage ratio would gradually reach 80%. We project the cost-toincome
ratio to continue its way to the sector average as the management persists on cost cutting and synergies from Unionbank
show up in the current year as well - we have reduced it to 52% in the final forecast year from 57% in 2014.
Our valuation is based on a 50:50 combination of residual income model (sustainable ROE fixed at 10%) and peer analysis (after
applying 15% minority discount to the equity value calculated under RIM and 25% discount to peers) resulted in a fair value of BGN
3.44 per share offering 41% upside potential and a BUY rating.
In Q4’14 the bank managed to restore its retail deposits to March-14 pre-bank run level of BGN 5.5bn by attracting BGN 600m. But
corporate accounts still stood quite lower at BGN 1bn vs. BGN 2bn before the Corpbank case triggered a run on Fibank. In
November, the bank repaid BGN 300m from the BGN 1.2bn state aid, provided last year. The remaining BGN 900m would be repaid
until May 2016 under a plan approved by the EC.
FY 2014, the net interest income increased to BGN 276m (+70% YoY), interest revenue jumped 12.8% YoY, while interest expenses
sank to BGN 227m (-20% YoY). Net fees&commissions fell 4.7% YoY to BGN 81.4m and TOI reached BGN 384.7m (+49% YoY).
Loan impairment charges read BGN 292m for 2014, up almost 5-fold on an annual basis. The cost of risk was up to 471bps from
126bps in 2013. However, BGN 160m revenue from sale of repossessed assets helped the bottom line. Hence, 2014 net profit
resulted in BGN 30.5m (+17.8% YoY). The loan portfolio fell by 2.6% QoQ to BGN 5.7bn (-4.7% YoY), L/D ratio stood at 88%. The
level of liquid assets to total liabilities improved to 28.2% at end-2014 from 23.2% at the end of September’14.
Valuation and performance rationale
We prepared detailed forecasts for Fibank until 2019, which include repayment of the state aid by 2016 and increase in other funding
sources by a CAGR of 1.9% until 2019, as the bank attracts more retail deposits but taps also the non-deposit market. We project a
slight decline in the cost of funding to 2.7% from 2.9% currently, reflecting lower deposit costs, which is the underlying trend in the
sector as well. The net interest margin is seen to converge towards 3.7% from 4.2% in 2014 as competition pressure weighs on loan
rates, while loans/assets ratio fluctuates around current 66% due to the subdued lending environment, which would prevail at least in
the next 2 years. Forecasted CAGR of net loans for 2014-2019 is 1.3%. We model in continuing elevated level of impairment charges
with cost of risk at average 1.8% for the forecast period, while coverage ratio would gradually reach 80%. We project the cost-toincome
ratio to continue its way to the sector average as the management persists on cost cutting and synergies from Unionbank
show up in the current year as well - we have reduced it to 52% in the final forecast year from 57% in 2014.
Our valuation is based on a 50:50 combination of residual income model (sustainable ROE fixed at 10%) and peer analysis (after
applying 15% minority discount to the equity value calculated under RIM and 25% discount to peers) resulted in a fair value of BGN
3.44 per share offering 41% upside potential and a BUY rating.
Иначе, да, не е ужасно трудно да предизвикаш мимолетно потапяне, ако нервите станат лабави 
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