The National Bank of Ukraine (NBU) on May 8 applied to Kyivska Rus Insurance Company PJSC a sanction in the form of temporary suspension of its license to provide financial services in insurance due to failure to submit reports for the first half of 2022 and for 2022, as well as an actuarial report for 2022.
According to the regulator’s website, the company also failed to submit a report on corporate governance and information on the key risks and the results of stress testing for 2022, and failed to provide information and documents requested by the NBU.
The insurer has been set a deadline for elimination of violations till June 8, 2023.
Private JSC “IC “Kyivska Rus” performs activity in voluntary and obligatory types of insurance, other than life insurance.
According to the accounts of the insurer for nine months of 2022 the amount of insurance payments totaled 85,4 mln UAH of which 76,9 mln UAH were paid out by reinsurers. The insurer made no payments during the above period.
Ukraine’s unemployment rate will decline to an average of 21.1% in 2023 from 21.1% in 2022, the National Bank said in its inflation report, explaining the improvement by revised methodology and positive trends in the labor market.
In its January report, it estimated unemployment in 2022 at 25.8% and expected it to rise slightly to 26.1% this year.
“In the absence of official statistics, assessing the impact of the war on the labor market, both in general and in terms of certain categories of the population and regions, is difficult and requires additional research methods, including the use of alternative sources of information. These are the data and survey results that allowed us to refine the unemployment estimate for 2022,” the NBU said.
He specified that based on such surveys, the average unemployment rate in 2022 is estimated at 19% to 23%. In addition, an improvement in the unemployment rate in the second half of 2022 was confirmed.
“Since the beginning of 2023, the labor market has been gradually recovering, but this process is still unstable… Since the beginning of 2023, the situation on the labor market has been improving. However, unemployment remains high and is becoming structural,” the NBU said.
It is noted that imbalances in the labor market will persist, the unemployment rate will remain higher than before the war, and real wage growth will be more restrained, but uneven by sector and region.
According to the published information, the recovery in the labor market was driven by an improved situation in the energy sector and a seasonal pickup in activity.
The NBU added that the burden per vacancy has increased and differs significantly between regions and professions. This is due to both changes in the structure of the economy as a result of the war and a large number of IDPs, and may indicate increased signs of structural unemployment. One of the reasons for structural unemployment is the difficulty of moving potential employees to a region where there is work in their specialty.
In terms of wages, the SSSU estimates that in 2022, thanks to the public sector, the average nominal wage increased by 5.9% (real wages decreased by 11.8%), which is better than the NBU’s previous estimates.
It is expected that real wages will grow by 3.7% on average in 2023, while nominal wages will grow by 21.9%, while in January the NBU estimated these figures at 3.3% and 25%, respectively.
As reported, the NBU improved its inflation forecast for this year to 14.8% from 18.7% compared to its January report. According to its estimates, inflation in annual terms will decline from 21.3% to 14.5% in the second quarter, after which it will fluctuate between 14.9 and 14.7% by the end of the first quarter of 2024.
The National Bank of Ukraine in accordance with the requirements of the new law “On Payment Services” has included Ukrposhta, NovaPay and six other companies in the payment infrastructure register and issued eight more licenses to provide financial payment services.
According to a statement from the NBU on Friday evening, they also included FC MBK LLC, Diamond Pay, United Space FC, Finexpress FC, Capital Business Group and Payment Center FC.
Such decisions were taken by the Committee on the supervision and regulation of non-banking financial services markets on April 27 and 28, 2023.
The National Bank reminded that the law “On Payment Services” was introduced on August 1, 2022. According to the law, the financial market participants licensed to transfer funds in national currency without opening accounts may apply to the National Bank of Ukraine till April 30, 2023 inclusive, in order to “re-register” their license as required by the law.
According to the NBU, the payment infrastructure register currently includes BOT and 83 other companies and organizations.
The National Bank of Ukraine (NBU) has improved its forecast for the country’s gross domestic product growth in 2023 to 2 percent from 0.3 percent in its January forecast, which is largely due to lower security risks, the restoration of the energy system, as well as soft fiscal policy.
“The economy will return to growth as early as this year and accelerate in the years ahead on the back of the reduced security risks in the forecast. Given the rapid recovery of the energy system, as well as the soft fiscal policy, the forecast of economic growth in 2023 has been improved from 0.3% to 2%,” the NBU said in a press release on Thursday.
It is indicated that the reduction of security risks from next year, which is allowed in the baseline scenario of the NBU forecast, will accelerate economic growth – up to 4.3% in 2024 and 6.4% in 2025.
Besides, de-occupation of territories and full opening of the Black Sea ports will gradually increase industrial production and crops.
The central bank also expects domestic demand to expand due to the return of some forced migrants.
The regulator noted that under the assumptions of the danger situation, no significant power shortages are envisaged in the future, except for local and situational deficits in the second half of the year.
At the same time, an increase in budget expenditures against the background of significant volumes of international financial aid will support economic activity and consumption.
The National Bank of Ukraine (NBU) has raised the country’s international reserves forecast for the end of 2023 to $34.5 billion from $27 billion in its January forecast.
“In total, receipts from international partners may exceed $42 billion this year. Receipts from partners, in particular, will boost international reserves to more than $35 billion at the end of this year,” NBU Governor Andriy Pyshny said Thursday, presenting the updated macro forecast.
The National Bank expects reserves to reach $36.1 billion at the end of 2024, while previously it had expected $31 billion.
According to the updated forecast, the estimate of the current account deficit is improved this year to $13.5 billion from $20.4 billion, but worsened next year to $10.6 billion from $8.4 billion, while last year its surplus was $8 billion.
The NBU points out that the persistence of a significant current account deficit in 2023, in particular due to increased imports amid a gradual recovery of domestic demand, the costs of a significant number of forced Ukrainian migrants abroad and still restrained exports as a result of declining harvests and limited logistics routes. At the same time, the arrival of international aid will offset these factors, the regulator added.
“The net inflow of currency to Ukraine remains due to significant volumes of international aid. This will strengthen the NBU’s ability to further maintain exchange rate stability and gradually ease currency restrictions,” the NBU noted.
The National Bank of Ukraine (NBU) has started assessing the soundness of 20 banks and the banking system, the regulator’s press service said on Wednesday.
According to the report, the assessment of soundness will be carried out as of April 1, 2023, in three stages.
The first stage includes assessment of asset quality and acceptability of collateral for credit operations, as well as verification of the assessment of the value of property received by the bank as collateral and the calculation of capital adequacy ratios.
The second stage involves extrapolation of the results of evaluation of asset quality and collateral acceptability to the bank’s credit operations, which were not selected in the first stage, and the third stage involves evaluation of the bank’s performance under the baseline scenario and determination of the required levels of capital adequacy ratios.
Terms of Reference and a model for assessing the forecast performance of the bank will be published separately on the website of the National Bank.
It is indicated that 2023 will be evaluated by financial institutions, which are leaders in the aggregate indicators of risk-weighted assets, deposits and loans to individuals.
The total net assets of these banks amount to more than 90% of the banking system assets.
In particular, PrivatBank, Oshchadbank, Raiffeisen Bank, Sense Bank, Universal Bank, FUIB, Ukreximbank, Ukrgasbank, OTP Bank, Ukrsibbank, Credit Agricole Bank, Credobank, A-Bank, Taskbank, ProCredit Bank, Pivdennyi Bank, Credit Dnipro Bank, Vostok Bank, MTB Bank and Pravex Bank will undergo the inspection.
The press service added that the results of the assessment of the stability of banks and the banking system of Ukraine, carried out in 2023, will be made public by March 31, 2024.
Rules of assessment of stability this year approved by the Board of the National Bank of Ukraine № 56, which comes into force on April 27, 2023.
NBU reminded that the assessment of the current situation in the banking system and obtaining information to determine the priorities for banking supervision is stipulated by a memorandum with the International Monetary Fund on economic and financial policies of March 24, 2023.
