The net profit of solvent banks in January-September 2023 reached UAH 109.9 billion, while in the same period of 222 this figure was only UAH 7.4 billion, the press service of the National Bank of Ukraine (NBU) reports.
“The main factor in the sector’s profitability remains the growth of interest income, primarily from highly liquid assets,” the regulator emphasized.
According to the NBU, operating income of financial institutions increased by 17.9% over the first nine months of the year, while net interest income increased by 38.7%. “Despite the increase in interest expenses due to higher interest rates on deposits, interest income grew more significantly,” the central bank said.
It is indicated that net fee and commission income in January-September increased by 5.4% year-on-year, but at the same time, its growth rate gradually slowed down due to a weak increase in payment card transactions.
The share of interest income in 9M2017 increased to 67.9% from 59.2% last year, while commission income decreased to 21.6% from 23.4%, and income from foreign exchange operations decreased to 7.3% from 14.5% due to the stability of the hryvnia exchange rate.
Overall, net operating profit before provisions increased by 23.9% to UAH 139 billion.
Another factor behind the sharp increase in profit was a 17-fold reduction in provisioning to UAH 5.7 billion. At the same time, the regulator reminded that since the beginning of the full-scale invasion of the Russian Federation, banks have formed UAH 104 billion of additional loan provisions.
In general, the sector’s return on equity as of October 1, 2023 amounted to 56.9% compared to 4.3% in 2022.
“The income tax accrued for the first nine months exceeded the corresponding annual figure for the historically most profitable year of 2021,” the NBU said. According to it, it amounted to UAH 19 billion against UAH 4.3 billion in the first nine months of last year.
It is reported that as of October 1 this year, only six banks out of 63 solvent banks made a loss, which in total amounted to UAH 155 million.
According to the NBU, preliminary results of the sustainability assessment show that banks generally adequately assess credit risks. However, possible adjustments to the valuation of assets and provisions by individual financial institutions may affect annual profitability, the regulator said.
According to the NBU, in September, the net profit of banks increased to UAH 14.8 billion from UAH 11.9 billion in August and almost reached the record figure of UAH 15.5 billion in July, while last September banks ended with a net loss of UAH 1.06 billion.
