Despite the reduction in the number of financial companies and pawnshops in July-September 2023, the segment’s assets, on the contrary, increased by 5.8%, according to the “Review of the Non-Banking Financial Sector. November 2023”.
According to the report, the volume of financial services provided increased in all major types, with the exception of factoring, which remained unchanged.
The regulator notes that the issuance of new loans to households in January-September this year decreased by 40% compared to the same period in 2021.
At the same time, the volume of financial leasing, which is mainly provided by legal entities – lessors, has been growing for the fifth consecutive quarter. New leasing agreements were concluded for the purchase of cars, agricultural machinery, and trucks. The sources of leasing financing are lessors’ equity and advance payments. The gradual recovery of basic financial services resulted in UAH 7.4 billion of profit in January-September 2023, of which more than half was generated by the state-owned institution Ukrfinzhytlo, the operator of the eHouse program, whose main income comes from interest payments on government bonds in the capital. Profitability was demonstrated by 72% of financial companies.
The NBU also notes that pawnshops continued to recover in the third quarter. The volume of assets and new loans increased slightly. Pawnshops’ revenues grew slowly, which made it possible to generate profits and improve profitability. Equity has increased by 9% since the beginning of the year due to profits from operations.
According to the regulator, the number of non-banking financial services providers decreased once again in the third quarter. The registry excluded 33 financial companies, eight credit unions, six pawnshops and four insurers. Most of the financial institutions left the market by voluntarily giving up their licenses.
In addition, two financial companies were removed from the register in accordance with the requirements of the Law on Payment Services and entered into the Register of Payment Infrastructure as payment institutions.
In the third quarter, the assets of non-bank financial services increased by 5.2% quarter-on-quarter and by 11.9% year-on-year. Assets grew in all market segments, but most rapidly in financial companies.
The share of non-bank financial institutions in the financial sector assets supervised by the NBU increased by 0.2 pp to 11.1% over the quarter.
The National Bank of Ukraine has cancelled licenses for four financial companies and one credit union, and excluded two credit unions from the State Register of Financial Institutions, according to the regulator’s website.
According to the NBU, the decisions of December 12, all licenses of Holastis Financial Company LLC, Maximum Financial Company LLC and Credit Finance Ukraine Financial Company LLC have been annulled.
As reported, on October 19, 2022 the mentioned institutions have been applied sanctions in the form of temporary suspension of licenses to provide financial services due to non-provision of information and documents about the ownership structure requested by the National Bank of Ukraine. As of the moment of taking decision on cancellation of licenses the violations have not been eliminated.
Besides, LLC “FC “Plaza Inves” has its license for provision of financial leasing services revoked due to failure to provide any financial service under this license during 12 months since the day of its issuance.
CC “Ukrainian Oshchad Center” is also excluded from the State Register of financial institutions due to the cancellation of all previous licenses and CC “Elliada” on the basis of its own application, guided by the special procedure during martial law.