The volume of currency purchases by the Ukrainian population in January 2023 exceeded the volume of its sales by $1 billion 103.2 million compared to $1 billion 26.2 million in December and $621.8 million in November, which was a new record since October 2012, the National Bank of Ukraine (NBU) said.
According to its website, such a result in January was once again provided by the cash currency segment, where its net purchase increased to $885.2m from $807.5m in December and $375-380m in November-October, while the balance of purchase and sale of non-cash currency remained at the level of the previous month – $218.0m.
As reported, the National Bank of Ukraine (NBU), which has held the official hryvnia exchange rate at $36.5686 UAH/$1 since the end of July 2022, has switched to a regime of managed exchange rate flexibility since October 3. Since late November, under the pressure of increased demand in the market, an obvious trend towards weakening of the national currency has been formed. Despite the increase in the National Bank’s interventions to $3.55 billion, the dollar on the interbank in December rose in price by 4.5%, or UAH 1.65 – to UAH 38.002/$1, and on the cash market due to the jump of about UAH in the last days of the year, its growth in December amounted to 5.3%, or about UAH 2 – to about $39.40 UAH/$1.
At the same time, at the end of January, the official hryvnia exchange rate strengthened to 37.5627 UAH/$1, while in the cash market – to 38.20 UAH/$1, and the spread between them narrowed again.
According to the NBU, after the exchange rate hike in late December, the first ten days of the month net purchase of currency on the non-cash market amounted to $10-30 mln, but after the exchange rate stabilized and the spread narrowed, the volume of net purchases fell significantly.
At the same time, in the cash market net purchase volumes, which averaged $40.5 mln per day in the first ten-day period of January, decreased to $34 mln in the middle of the month, but in the last ten-day period grew to $48.4 mln.
According to some market participants, a new factor in the cash market, as it already happened at the end of last year, may be the adoption of the bill on mobilization, which provides for the arrest of accounts of those who do not appear at the TCC on summons.
According to the National Bank, in general, the volume of non-cash currency sales by households in January decreased to $276.7 million from $311.7 million in December, while the volume of purchases – to $494.7 million from $530.3 million.
In the cash market in January, purchases fell to $1 billion 890.9 million from $2 billion 65.9 million, as did sales to $1 billion 5.8 million from $1 billion 258.4 million.
As reported, in total for 2022, according to official statistics, the population bought $880.1 million more currency than sold, including net purchase of cash currency amounted to $1.01 billion. For 2023, net purchase of currency by the population reached $4 billion 792.8 million, including cash – $3 billion 632.1 million.
In the non-cash foreign exchange market, the purchase of currency by bank customers in January decreased more significantly – to $5.06 billion from $7.06 billion in December, while sales – not so significantly: to $4.17 billion from $4.91 billion.
As a result, net purchases fell to $0.88 billion in January from $2.15 billion in December, back to May-June 2023 levels.
As for the volume of transactions between banks, after December’s all-time record of $5.99bn, it fell to $4.34bn in January, still significantly higher than before the exchange rate liberalization.
The National Bank of Ukraine has included Aston Ukraine LLC and Insurance Bureau Kompanion LLC in the State Register of Insurance and Reinsurance Brokers, according to the regulator’s website.
According to the resource Opendatabot, LLC “Aston Ukraine” (Kiev) was registered in May 2016. The authorized capital of the company – 597,8 thousand UAH. Its income for 2022 amounted to UAH 1.721 million, net profit – UAH 4.3 million, assets – UAH 700.6 thousand, liabilities – UAH 26 thousand. The staff consists of 10 employees.
Insurance Bureau “Kompanion” LLC was registered in August 2014. Authorized capital – UAH 53 thousand.
As reported, as of January 1, 2024, 23 insurance and reinsurance brokers were registered in Ukraine.
Aston Ukraine, Insurance Bureau Kompanion, NATIONAL BANK OF UKRAINE
On January 8 and 9, 2024, the National Bank of Ukraine (NBU) excluded 42 non-bank financial institutions from the State Register of Financial Institutions and four more – from the Register of persons who are not financial institutions but have the right to provide certain financial services.
According to the regulator’s website, the reason for this decision was the absence of valid licenses for the provision of financial services in these companies as of January 1, 2024.
According to the NBU, limited liability companies Morgan Capital, New World FC, Finextra FC, Motor City Autocenter, DSD Finance, Inform-Aktiv, FC Factoring Alpha, FC Contract Plus, FC Fintakt, FC HIT, FC HIT, “Viridi-Lux, Regional Credit, FDS Finance, FC Proxima, Paritet Finance, FC Finaktiv, FC Argo, Factoring Company Debt Obligations Fund, FC Ukrainian Capital, FC Avila Finance, Europartner Finance, FC Fingroup Factor and FC Fintech Solutions.
Also excluded from this register are: “Lombard” Dobrye Traditions “My Capital” and “Guarantee of Success”, “Kucher and company pawnshop “Partner”, “Lombard Privat” Sich S.V. and company, “Your Lombard” Lukacek and company, “Lombard” Kuzmin and Kuzmin “Eurocom”, “Eurolombard” Astapenko A.A. and Svetashova T.V. “, “Lombard “Reverse” LLC “Templeria” and company”, “Lombard Pledge Society “Diamantovy Dom” LLC “Moneta” and companies”, “Lombard Pharmacia and co.” “Khrushcha and companies “Lombard AVK”, “Lombard “Alatir” LLC “Trisel” and company”, “Lombard “Vista” LLC “I-TE 911″ and company”, “Lombard – Karkuzaev and company”, “Lombard” Nevedrov Yu. A. and company”, “Lisenko and company-lombard”, “Pawnshop “Credit VIP-Gold and company”, “Universal pawnshop “Groshovychok” LLC “Financial Assistance” and company”, “Pawnshop “Premium” Velichko Alexander Viktorovich and company” and PJSC “Sempre System Finance”.
In addition, limited liability companies Agrarno-Gruzovaya Kompaniya, Alfa Leasing Ukraine, Kar Invest Ukraine, Light Leasing were excluded from the Register of persons who are not financial institutions, but have the right to provide certain financial services.
NATIONAL BANK OF UKRAINE, Ukraine's non-banking financial market
Net sales of dollars by the National Bank of Ukraine (NBU) last week fell to $789.3 million from $891.8 million in the last week of last year, data on the regulator’s website showed on Friday. In the first half of the week, for which the central bank has already published the data, the purchase of currency by bank clients was growing: from a minimum of $56.52 million on Monday to $202.69 million on Wednesday.
As a result, the NBU on Wednesday weakened the official hryvnia exchange rate by 0.08%, or 3 kopecks, to a new low of UAH 38.1159/$1.
Nevertheless, on Thursday the demand weakened slightly, as a result the exchange rate strengthened by 0.20%, or by 7 kopecks, to 38.0412 UAH/$1, and on Friday, the last day of trading, the hryvnia weakened again slightly – by 0.10%, or by 3 kopecks, to 38.0775 UAH/$.
Overall, since Monday, the dollar has appreciated by 0.20%, and since the National Bank’s transition to the regime of managed flexibility on October 3, 2023, the dollar has become more expensive by 4.13%, or 1 UAH 51 kopecks. A pronounced trend towards weakening of the national currency began on November 26 last year, and since then the hryvnia has devalued by 5.73%.
In the cash market on Friday, the dollar rose by 1% to UAH 39.49/$1, returning to the pre-New Year dynamics after a rebound in the first days of the year.
Overall, the NBU’s net sales in December rose to about $3.57 billion from $2.46 billion in November, $3.34 billion in October and $2.69 billion in September. Last month, the Finance Ministry raised $5 billion in external financing, which boosted international reserves by 4.4% in December to $40 billion 507.9 million, the second highest in history after July 2023.
The National Bank of Ukraine (NBU) in December fined five banks – Oxy Bank, Accordbank, Universal Bank (mono), MTB Bank and Cominbank – for a total amount of over UAH 66.74 million, the regulator said on its website on Friday.
The largest fine of UAH 20.05 million was imposed on Oxy Bank for improper verification of clients and their financial transactions, violations of financial monitoring, currency control and the bank’s obligation to use a risk-oriented approach in its activities.
According to the release, Accordbank has to pay UAH 18.84 mln for improper risk management system and check of the payer for transfer of funds, submission of unreliable information by the bank to the regulator, as well as for violations in the sphere of currency legislation.
Universal Bank was fined UAH 10.45 mln for improper customer verification, online monitoring and application of risk-oriented approach.
Similar reasons caused almost the same fine – UAH 10.40 mln – to MTB Bank.
The National Bank also fined Cominbank UAH 10m due to its late and incomplete submission of documents to the regulator regarding the bank’s compliance with the legislation on preventing money laundering.
Accordbank, COMINBANK, NATIONAL BANK OF UKRAINE, Oxy Bank, МТБ Банк, Універсал Банк (mono)
The National Bank of Ukraine has updated the requirements for the capital structure of banks in accordance with the norms of the law adopted in June 2021 on improving the organization of corporate governance in banks and other issues of functioning of the banking system (No. 1587-IX), which determine the introduction of a new (three-tier) capital structure for banks from August 5, 2024.
“The new requirements are expected to be introduced in stages: by April 1, banks must develop internal regulations for determining the amount of regulatory capital; from April 1 to July 1 – to conduct test calculations and report their results to the NBU; from August 5, 2024 – to begin the implementation of the calculation of regulatory capital according to the new requirements,” the regulator said in a release on its website.
It is indicated that the regulation on the procedure for determining the amount of regulatory capital by banks of Ukraine determines: the procedure for calculating the basic capital of I level, additional capital of I level, capital of II level, their components and deductions from them; requirements for the components of capital, at the expense of which the capital is formed; procedure and conditions for obtaining by the bank of the permission / approval of the National Bank regarding the inclusion of individual components in the capital, etc.
The National Bank emphasized that the introduction of the new capital structure is another significant step towards the standards of the European Union.
“The introduction of the new capital structure for banks is a significant step to improve the stability of the banking system and its competitiveness. Taking into account the results of the stability assessment, the current state of banks and the phased introduction of new requirements, we are confident that banks will cope with this task,” the release quotes First Deputy Head of the NBU Ekaterina Rozhkova as saying.
It is specified that the regulation on the procedure for determining the size of regulatory capital by banks of Ukraine was approved by the resolution of the Board of the National Bank of December 28, 2023 № 196, which comes into force on December 30, 2023.
