The decrease in the share of non-performing loans (NPL) in the banking sector of Ukraine to 35% from 36.3% in August was facilitated by the correct regulatory policy of the National Bank and less risky new loans that banks are issuing now, the founder and partner of the group of companies, Andriy Volkov, commented on the statistics of the central bank for the specified month to the Interfax-Ukraine agency.
He considers the decline in the share of problem loans in the banking system to be a natural process for several reasons. First, the NBU introduced rather strict rules for the assessment and provisioning of the loan portfolio, after which the banks began fruitful work on restructuring NPLs, collecting them or selling them to specialized companies. Secondly, the country is gradually resuming lending – both retail and corporate. However, due to the filing of the banks’ risk management and NBU requirements, it is now less risky and produces much fewer non-performing loans. Accordingly, the portfolio of banks began to grow again, which means that the share of old problem debts began to decline.
According to Volkov’s forecasts, this trend will continue, and the share of non-performing loans will continue to decrease.
At the same time, he drew attention to where these troubled debts are concentrated.
“Commercial banks, for the most part, have resolved or are successfully solving issues with non-performing loans: they have restructured more or less “live” debts or debts associated with the shareholders and the bank management, collected collateral from non-performing loans, sold or are selling loans, with the collection of which they cannot cope independently. Therefore, the main volume of bad debts was concentrated in state banks. And this is the next point of development for the Ukrainian NPL market, in which changes must take place – the system of working with problem debts of state banks will change or, more realistically, the sale of bad debts will begin, because without this, neither development nor sale of state-owned banks is possible,” the financier believes.
In addition, according to him, solving problems with problem debts in state banks is also on the agenda of international creditors and donors of Ukraine. Therefore, the government as a shareholder, the NBU as a regulator, as well as the supervisory boards of state banks are forced to pay sufficient attention to them.
