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2023: Growth in the share of bad loans to 40% of the banking system or $11 billion
Against the background of the armed conflict in Ukraine, the share of non-performing loans in Ukrainian banks increased to $11 billion. 40% of the banking system is NPL. These are non-refundable loans.
2022: Ukraine adopted a law on the nationalization of backbone banks
At the end of October 2022, President of Ukraine Volodymyr Zelenskyy signed a law on the possibility of nationalizing backbone banks in the country.
 | The state represented by the Ministry of Finance of Ukraine is participating in the withdrawal from the market of a system-forming bank, according to which the National Bank of Ukraine decided to classify as insolvent, the document says, an excerpt from which is provided by RBC. |  |
The law notes that such a procedure is provided for during the period of a special military operation of Russia on the territory of Ukraine.
If the system-forming bank is recognized as "insolvent," then its sale for 1 hryvnia will occur regardless of the actual size of the bank's capital. If the value of the bank's shares exceeds 1 hryvnia, then "compensation will be made at the expense of Russia's funds received in the form of compensation for the damage caused to Ukraine." And instead of exchanging deposits for shares with their subsequent redemption by the state, the bank's obligations to the regulatory authorities and shareholders will cease.
14 backbone banks were included in the list of those subject to nationalization: A-Bank, Alfa-Bank Ukraine, Credobank, OTP Bank, Oschadbank, Yuzhny, Privatbank, Pumba, Raiffeisen Bank, Taskombank, Ukrgazbank, Ukreximbank, Ukrsibbank and Universal Bank.
As the Страна.ua Internet agency reported at the end of October 2022, citing information received from deputies of the Servant of the People party, the nationalization of Alfa Bank is being prepared in Ukraine. As the deputy of the Verkhovna Rada Roksolan Pidlas clarified, the National Bank formally recognizes it as insolvent and will capitalize.
Earlier, Ukraine imposed sanctions on Alfa-Bank shareholders Mikhail Fridman and Peter Aven.[1]
2021
Central Bank of Ukraine banned banks from accepting Russian rubles to replenish deposits
On October 20, 2021, it became known that the National Bank of Ukraine (NBU) banned the country's banks from accepting Russian rubles to replenish deposits. The regulator's decision will come into force in a month - November 21.
| | The Bank is prohibited to carry out cash transactions for receiving foreign currency of the occupying state for crediting to deposits (deposit) accounts of individuals for the period of the law "On ensuring the rights and freedoms of citizens and the legal regime in the temporarily occupied territory of Ukraine," - said in the decree of the head of the Ukrainian National Bank Kirill Shevchenko "On amending the instructions for cash transactions by banks of Ukraine," which on October 20 was at the disposal of the media. | |
On October 19, 2021, Ukrainian banks received the decree, reports the publication "Страна.ua," one of the first to pay attention to the document. Unnamed sources of the publication in the NBU said that the restriction applies only to deposit accounts of the population. At the same time, a high-ranking source of "Страна.ua" in one of the banks of Ukraine said that banks are preparing to stop accepting rubles for any accounts, including current and card accounts. Officially, banks did not report this.
According to the Ukrainian publication "Ministry of Finance," in recent years, ruble deposits have ceased to be popular in Ukraine. According to the NBU, at the beginning of September 2021, citizens had 321 million hryvnia (870.4 million rubles) in accounts in Russian rubles opened in Ukrainian banks, of which 3 million hryvnia (8.1 million rubles) on deposits. For comparison: at the end of 2013, 889 million hryvnias (2.4 billion rubles at the current exchange rate) were stored in ruble accounts, including 733 million hryvnias (almost 2 billion rubles) on deposits[2][3]
DPR wrote off loans of its citizens to banks of Ukraine
Deputies of the Donetsk People's Republic in April 2021 recognized the null and void rights of Ukrainian banks to the debts of DPR residents on loans taken before November 14, 2014. According to the Donetsk News Agency, this norm is spelled out in the law adopted on April 30 "On the circulation of property owned by banks of Ukraine into the ownership of the Donetsk People's Republic."
"It is envisaged to terminate the rights of the claims of these organizations of banks of Ukraine to citizens on obligations that arose before November 14, 2014 - the date of signing the decree of the President of Ukraine No. 875/2014, according to which the service of persons by banks of Ukraine was stopped on the territory of the Donetsk People's Republic," explained Maxim Knysh, chairman of the committee on constitutional legislation and state building.
According to him, transactions on the transfer of rights of claim of credit institutions to third parties on the basis of a factoring agreement or debt transfer are null and void. Also, restrictions on the rights of citizens to movable property on obligations to banks of Ukraine are stopped.
2019: Distressed loans - 55% of the total portfolio of loans issued
The country's banking sector, half of whose assets are concentrated in the hands of state-owned banks, remains rather fragile. In October 2018, the Rada adopted a new Code on Bankruptcy Procedures, but this did not help significantly reduce the volume of problem loans - by May 2019, their share is 55% of the total portfolio of loans issued.
2018
Profit of Ukrainian banks reached UAH 21.7 billion
On February 13, 2019, information appeared that the Ukrainian banks they earned UAH 21.7 billion in profit (or 52.9 billion) rubles in 2018, which was the best result of the sector in history. The banking system became profitable for the first time since 2013.
Only 13 out of 77 financial institutions showed a loss at the end of the year. Bankers in 2018 earned the most on consumer lending and government securities.
The top ten most profitable banks changed minimally compared to 2017. The top included, Privatbank which in 2017 showed a loss of almost UAH 23 billion, and at the end of 2018 became the most profitable bank in the country (profit - UAH 11.7 billion)., Oschadbank on the contrary, lost its place among the most successful financial institutions, reducing net profit by 4 times.
PrivatBank climbed to 1st place. Oschadbank dropped to 18th position.
In addition to PrivatBank, more than UAH 1 billion earned seven more financial institutions per year. Six of them are banks with foreign capital, which jointly earned UAH 15 billion.
Among banks with private Ukrainian capital, only two - Rinat Akhmetov's PUMB and the Surkis family's A-Bank - were able to receive more than UAH 500 million in profit.
In losses, as before, "Russians" are "sitting": Sberbank and Prominvestbank for two worked with a "minus" of UAH 11 billion.
Another bank of Russian origin - Forward Rustam Tariko - received a loss of UAH 165 million. The financial institutions of the Ukrainian oligarchs also showed negative results: Credit DneprViktor Pinchuk and Yunex Bank Vadim Novinsky.
One of the main trends in 2018 is that banks began to earn more on commissions. Common to the market, although a temporary factor is an increase in interest income from government securities, which is associated with a high level of the discount rate. NBU
Interest on loans to legal entities generates less than half of the income of the banking sector - 46%. Lending to individuals brought 26% of income, OVGZ - 27%, commissions - 25%.
NBU data, 2017-2018
A big plus was the significant decrease in deductions to reserves for non-performing loans: according to the NBU, banks reserved UAH 23.7 billion for the year - 2 times less than in 2017. This is the lowest figure since 2012.
The disbandment of reserves, according to the NBU, helped two state-owned banks - Oschad and Ukrexime - to reach net profit, despite operating losses (EBIT - profit before interest and taxes).
In general, the National Bank does not observe a significant improvement in the operational work of banks.
Banks continue to actively lend to the population - growth in 2018 exceeded 35%. About 90% of new loans to individuals are loans for current needs.
Long-term loans are relatively small: 7% of the new portfolio is occupied by car loans, 2% - real estate. According to the NBU, more than 70% of retail lending to individuals is controlled by 5 banks. Two-thirds of the total loan portfolio is accounted for by 10 financial institutions.
In the corporate segment, the struggle for solvent borrowers continues: the growth rate of companies that did not allow defaults in 2014-18 exceeded 30% in foreign currency and 25% in hryvnia.
Relatively small loans in the amount of UAH 2 to 10 million have become more - 13% in the total portfolio, in 2018 it was 5%. Banks with foreign capital lend the most actively to small and medium-sized businesses: according to the results of 10 months, SMEs occupied 17% of their corporate portfolio.
The volume of loans that are not serviced remains consistently high: more than half of all debts in the banking sector are in bad default.
The money of individuals covers about 50% of the funds of private clients of banks. 45% of them are current accounts, the rest are deposits. The ratio of term deposits to GDP remains low - 15%, which is half as much as it was before the 2014-15 crisis.
* Укрсоцбанк находится в стадии слияния с Alfa-Bank
Notably, checking accounts are more preferred to deposits by banks with foreign capital, which can afford to set the lowest deposit rates on the market.[4]
Privatbank remains the main creditor of the population
At the end of 2018, the portfolio of loans to individuals grew most significantly in PrivatBank - by UAH 8.1 billion (+ 26%).
In addition, Alfa-Bank (+ UAH 3.7 billion, or + 43%), PUMB (+ UAH 2.7 billion, or + 47%), Universal Bank (+ UAH 1.7 billion, or + 83%), Oschadbank (+ UAH 1.6 billion, or + 41%), OTP Bank (+ UAH 1.2 billion, or + 25%), Ukrgazbank (+ UAH 1 billion, or + 61%).
Among the top 20 banks-creditors of the population, the corresponding portfolio decreased only in Ukrsotsbank (UAH -2 billion, or -28%).[5] The official rate of the NBU on the 01.01.2019 was 27.688 UAH/dollar, on the 01.01.2018 - 28.067 UAH/dollar.
Notes
- ↑ Zelensky signed a law on the nationalization of backbone banks
- ↑ Resolution About zmіni introduced before the Іnstruktsії about the wedge of cash operatsіy by banks in the Ukraїnі
- ↑ of the NBU to introduce a fence on the subject of depozitіv fіzosіb in rosіyskikh rubles
- ↑ On what banks earned 22 billion. We explain in 10 schedules
- ↑ NBU: Privatbank remains the main creditor of the population (infographics).
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