Ukraine - Banking SystemsUkraine - Banking
The Ukrainian banking sector has a two-tier structure made up of the National Bank of Ukraine (NBU) and commercial banks of various types and forms of ownership. The NBU is responsible for monetary policy, licensing of commercial banks, and the oversight of their activities. Current Ukrainian legislation distinguishes between “universal” (general) commercial banks and “specialized” commercial banks, with the latter including savings, investment, mortgage, and settlement (clearing) banks. A commercial bank carries out its banking activities under a banking license issued by the NBU.
In 2018, the banking sector of 77 operating banks earned UAH 21.7 billion in net profit (or a ROE of 14.3%). As the profits that the banks reported in the past were primarily the result of the window dressing of financial statements and deliberate understatement of provisioning amounts, this is most likely the first time in its history that Ukraine’s banking sector has been profitable. The banks still have substantial NPLs on their balance sheets but have already reported nearly all their losses from decreases in the quality of their loan portfolios. The NPL coverage ratio stands at 95.5 percent, which is acceptable according to international standards.
The key banks' priorities for 2019 are to resume corporate lending in full and to clean up further their balance sheets of NPLs. This year, NBU will present the concept for a new structure of regulatory capital, as well as the Net Stable Funding Ratio. The new regulations will come into effect after they have been discussed with the banks. At the same time, the banks will be given a grace period to ease their transition to operation under the new regulations.
The state’s share of total banking assets reached nearly 54.7 percent by net assets and 63.4 percent by household deposits. Foreign capital represented 30.4 percent of the total capital in the banking sector. The locally owned private banks accounted for the remaining 14.8 percent of the asset base.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
In 2018, the banking sector of 77 operating banks earned UAH 21.7 billion in net profit (or a ROE of 14.3%). As the profits that the banks reported in the past were primarily the result of the window dressing of financial statements and deliberate understatement of provisioning amounts, this is most likely the first time in its history that Ukraine’s banking sector has been profitable. The banks still have substantial NPLs on their balance sheets but have already reported nearly all their losses from decreases in the quality of their loan portfolios. The NPL coverage ratio stands at 95.5 percent, which is acceptable according to international standards.
The key banks' priorities for 2019 are to resume corporate lending in full and to clean up further their balance sheets of NPLs. This year, NBU will present the concept for a new structure of regulatory capital, as well as the Net Stable Funding Ratio. The new regulations will come into effect after they have been discussed with the banks. At the same time, the banks will be given a grace period to ease their transition to operation under the new regulations.
The state’s share of total banking assets reached nearly 54.7 percent by net assets and 63.4 percent by household deposits. Foreign capital represented 30.4 percent of the total capital in the banking sector. The locally owned private banks accounted for the remaining 14.8 percent of the asset base.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.