According to audited results of 2016, Tsesnabank's net profit decreased by 32.7% yoy and amounted to T12 bn, while operating expenses grew by 46.5% yoy. The bank's assets increased by 15.5% yoy due to a rise in the deposit base of the bank by 16% yoy and the receipt by the bank of additional liquidity on repo transactions in the amount of T102 bn at the end of 2016.

Compared to other banks, the bank has a low level of liquidity and return on capital and weak capitalization. The upcoming consolidation with Bank CenterCredit may increase pressure on these indicators.  We also note the significant difference between the level of formed reserves and the share of uncollected interest income, which may indicate an insufficient provision and an incomplete reflection of overdue loans.

We continue to believe that the issued bonds of Tsesnabank are not high-yielding instruments in comparison with bank deposits and alternative debt obligations of other issuers for a comparable period and we keep our recommendation to Hold bonds of Tsesnabank.

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