In January-June this year, Ukrainian banks increased their net profit by UAH 11.4 billion, or 16.8% compared to the same period in 2023, to UAH 79.04 billion, the National Bank of Ukraine (NBU) reported.
“The main factors of profitability are the maintenance of a high net interest margin and almost zero allocations to provisions for losses from active operations,” the NBU explained the reasons for the increase in profitability.
“In the first half of the year, only seven small banks out of 62 solvent banks were unprofitable with a total loss of UAH 171 million,” the NBU said.
According to the NBU, the profitability of banks’ core assets continued to decline in the second quarter. In particular, it fell most rapidly for NBU certificates of deposit, which led banks to reduce their investments in these securities, the regulator said.
At the same time, interest rates on domestic government bonds (OVDPs) also went down, but the volume of investments in them grew.
“It is due to the increase in assets that banks have maintained a fairly high net interest margin and increased revenues,” the regulator emphasized.
It is noted that the return on equity of banks in the first half of 2024 amounted to 48.4%, which is lower than the same indicator in the first half of 2023, which was 56%.
The amount of income tax accrued by banks in the first six months of this year amounted to UAH 21.9 billion, compared to UAH 12.4 billion in the same period last year, as the income tax rate was increased from 18% to 25%.
According to the NBU, the banking system’s net profit last year amounted to UAH 82.8 billion after charging UAH 76.2 billion in income tax at the increased rate of 50%.
The National Bank of Ukraine (NBU) this week increased its net sale of foreign currency on the interbank market to $949.9m from $532.1m the previous week, according to the regulator’s data. According to them, the volume of currency purchases by the central bank remains paltry at $0.27m, while its sales rose to $950.2m.
Over the week, the official hryvnia exchange rate weakened to a record 41.4912 UAH/$1 from 41.0107 UAH/$1.
Since the beginning of 2024, the dollar at the official exchange rate has become more expensive by 9.2%, or by UAH 3.49, and since the transition of the National Bank on October 3, 2023 to the regime of managed flexibility – by 13.4%, or by UAH 4.93.
On the cash market, the hryvnia weakened by about 70 cents during the week. – To 41.95 UAH/$1.
According to the data that the NBU managed to publish during this period, from Monday to Thursday the negative balance between the volume of currency purchases and sales by households increased from $36.5 million to $52.9 million, following the weakening of the hryvnia.
Ukraine’s international reserves fell by $1.14 billion to $37.89 billion in June, according to the NBU’s preliminary estimates, while the National Bank’s net interventions totaled $2.99 billion, down from $3.07 billion in May.
In May 2024, state-owned PrivatBank increased its net profit by 80% compared to April and with UAH 6.5 billion topped the country’s five most profitable banks, according to the National Bank of Ukraine (NBU) on its website. According to the data, Privat is followed by state-owned Oschadbank, which earned UAH 2.3 billion in net profit in May, up 40.3% from April.
Another state-owned bank, Ukreximbank, rounded out the top three most profitable banks in May, increasing its net profit more than threefold to UAH 1.3 billion compared to April, and pushing Raiffeisen Bank to fourth place, whose net profit in May decreased by 16.3% to UAH 670.2 million compared to April.
The top five in May was rounded out by Pivdenny Bank, which quadrupled its net profit in May compared to April to UAH 632 million.
The second five were formed by Universal Bank (mono) – UAH 625.4 million, Uksibbank – UAH 594.8 million, FUIB – UAH 534.9 million, Credit Agricole Bank – UAH 506.6 million and OTP Bank – UAH 446 million.
According to the statistics, Ukrgasbank, which was the 7th largest bank in terms of net profit in April, took the 12th position in May with a net profit of UAH 370.3 million.
In addition to Ukrgasbank, four other banks made a net profit of over UAH 100 million in May 2024: City Bank – UAH 390 million, Sense Bank, which was nationalized last July, – UAH 254 million, Cominbank – UAH 137.8 million, and Kredobank – UAH 121 million.
The top three most unprofitable banks in May were led by Poltava-Bank with a net loss of UAH 28.8 million, followed by Cominvestbank with UAH 17.2 million and Industrialbank with UAH 6.5 million.
Overall, in the first 5 months of 2024, banks’ net profit increased to UAH 67.9 billion from UAH 52.1 billion in the first four months of the year.
This week, the National Bank of Ukraine (NBU) reduced its net sales of dollars on the interbank market to $670.41 million from $722.57 million the previous week, according to the regulator. According to the data, the central bank bought $0.49 million, while selling $670.90 million.
The official hryvnia exchange rate rose by 0.2%, or 10 kopecks, over the week, in particular, on Friday it strengthened by 8 kopecks to 40.4542 UAH/$1. On the cash market, the dollar also fell by 5 kopecks to 40.82 UAH/$1.
Since the beginning of 2024, the official hryvnia exchange rate has fallen by 6.5%, or UAH 2.45, and since the National Bank switched to a managed flexibility regime on October 3, 2023, it has fallen by 10.6%, or UAH 3.89.
According to the data published by the NBU during this period, from Monday to Wednesday, the negative balance between the volume of foreign currency purchases and sales by the population widened from $42.78 million to $45.66 million.
Overall, in June, the NBU’s net interventions amounted to $2.99 billion, compared to $3.07 billion in May and $2.28 billion in April. According to preliminary estimates of the National Bank, Ukraine’s international reserves decreased by 7.9%, or $3.4 billion, to $39 billion 033.8 million last month.
At the same time, the official hryvnia exchange rate weakened by 90 kopecks in May, from 39.6370 UAH/$1 to 40.5373 UAH/$1, gradually updating its historical lows every day in the last ten days of the month and approaching the average annual exchange rate of 40.7 UAH/$1 set in the state budget for 2024. In the cash market, the hryvnia also weakened by UAH 1.24 over the month to UAH 41.05/$1. The National Bank explained this weakening by the government’s increased spending after receiving external financing in March-April, as well as the impact of the largest package of currency restrictions for businesses since the start of the full-scale war announced on May 3.
On June 17, the National Bank of Ukraine (NBU) has agreed with MetLife PJSC, specializing in life insurance, to expand the scope of the license for direct insurance and incoming reinsurance.
According to the regulator’s website, the company has received the right to carry out insurance in the classes of accident insurance (including industrial injury and occupational disease) and sickness insurance (including health insurance).
The message also underlines that taking into account this extension the license of PJSC “MetLife” is considered to be reissued.
According to the statements of PJSC “MetLife”, the volume of insurance premiums of the company in the specified period amounted to UAH 2,489 billion, insurance reserves – UAH 6,186 billion.
For 2023 the insurer has paid out insurance indemnities in the amount of UAH 516,6 mln.
The share of the company by the volume of insurance reserves in the life insurance market is 31,3%.
Private JSC “MetLife” is a part of the leading world corporation MetLife. The company has been operating in Ukraine since 2002. The main lines of business are accumulative life insurance, accident and critical illness insurance, corporate insurance and bancassurance.
The reference exchange rate of the hryvnia to the US dollar on the interbank foreign exchange market as of 12:00 a.m. on May 24, 2024.
Reference hryvnia to US dollar exchange rate (UAH/$) 39.8825 40.0752 0.48
Source: NBU
