Business news from Ukraine

National Bank has released rating of top 20 insurers in Ukraine

The leaders of the Ukrainian insurance market in terms of collected net insurance premiums in January-September 2023 were: ARKS Insurance Company (UAH 2.378 billion), TAS Insurance Group (UAH 2.601 billion) and Unica Insurance Company (UAH 1.984 billion) (all based in Kyiv).

No. Name of IC Net premiums Growth rate Written premiums Growth rate Assets Reserves

1 ARX 2378 +6.8% 2760 +21.5% 5455 2838

2 TAS 2601 +54.7% 2542 +47.7% 3696 2486

3 UNIQ 1984 +9.4% 2381 +23.8% 4557 2114

4 VUSO 1693 +86.2% 2005 +78% 1726 1087

5 USG 1632 +17.2% 2243 -1.2% 3767 2312

6 INGO 1466 +34.6% 1993 +64.9% 3527 1889

7 Arsenal Insurance 1323 +5.3% 1599 +42.3 2383 1602

8 Universalna 1212 +48.3% 1463 +54.7% 2062 1121

9 PZU Ukraine 1109 +33.1% 1314 +42% 2065 1394

10 Oranta 927.8 +16.2% 1100 +29.6 1535 980.3

11 Guardian 844.5 +57.2% 1010 +60.5% 996.3 699.3

12 Knyazha VIG 825.5 +40.7% 1464 +68.9% 1758 1382

13 Premier Garant Profi 620.4 +26.9 617.5 +25.6% 180.2 19.7

14 Persha 487.4 +59.3% 599.4 +47.7% 926.9 639.9

15 Express Insurance 468.5 +12.5% 511.1 +68.5% 715 360.1

16 Colonnade Ukraine 355.1 +39% 450.2 65.4% 863 337.7

17 Euroins Ukraine 321.3 +9.3% 408 +22.1 1059 647.5

18 Alfa Garant 298.3 +24.2% 330.9 +37.6% 348.3 294

19 Oberig 293 +47.8% 275.1 +30.7% 278.3 186.8

20 UPSC 282.4 -63.9% 359.7 +0.2% 690.1 267

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National Bank has published rating of most profitable banks in Ukraine

In the third quarter of 2023, state-owned PrivatBank once again topped the list of banks with the highest net profit with UAH 13 billion 623.5 million, followed by two other state-owned banks: Oschadbank with UAH 7 billion 338.2 million and the nationalized Sens-Bank with UAH 3 billion 440.5 million.

According to the data published by the National Bank of Ukraine on its website, the top five banks with the highest net profit in the third quarter also include two banks with foreign capital: Raiffeisen Bank – UAH 3 billion 17.1 million and Ukrsibbank – UAH 2 billion 98.9 million.

The second five banks were state-owned: the private Ukrainian FUIB – UAH 2 billion 4.4 million, the foreign subsidiary of OTP Bank – UAH 1 billion 893.4 million, the state-owned Ukreximbank – UAH 1 billion 619.2 million, and two other banks with foreign capital: Citibank – UAH 1 billion 469.7 million and Credit Agricole Bank – UAH 1 billion 299.3 million.

Universal Bank (mono) made almost the same net profit in July-September of this year – UAH 1 billion 294.4 million, while Kredobank, which follows, made a much smaller profit of UAH 594.6 million.

Two other banks made profits of over UAH 300 million in the third quarter: A-Bank – UAH 355.2 million and Ukrgasbank – UAH 325.0 million.

Of these 14 banks, only four have completed their reserves: Sense – UAH 548.0 million, while City, Raif and Credit Agricole – from UAH 30 million to UAH 20 million, while FUIB disbanded them by UAH 1 billion 413.4 million, Mono – UAH 1 billion 136.6 million, OTP, A-Bank and Ukrgas – from UAH 555 million to UAH 510 million.

The list of 7 unprofitable banks in the third quarter was headed by First Investment Bank of the sanctioned shareholders with a loss of UAH 33.0 million, while Credit-Dnipro and Privex-Bank also suffered similar losses of UAH 29.8 million and UAH 27.5 million, respectively.

Overall, in the third quarter, the net profit of 63 solvent banks amounted to UAH 42.33 billion, with provisions released by UAH 5 billion and total assets increasing by UAH 87.25 billion.

The three most profitable state-owned banks were the leaders in terms of asset growth: Privat – UAH 36.84 billion, Oschad – UAH 18.26 billion, and Sens – UAH 11.36 billion. This allowed Sens to return to the top ten banks by assets, from which it had fallen in June before the nationalization, and immediately to 8th place.

In the third quarter, Ukrexim’s assets decreased by UAH 15.65 billion, Pivdennyi’s by UAH 6.99 billion, and Ukrgas’s by UAH 1.54 billion, and 23 banks in total showed a decline in assets.

In the third quarter, banks increased their portfolio of government bonds by UAH 23.56 billion, with City – UAH 4.61 billion and Ukrgas – UAH 4.48 billion, followed by TAScombank, FUIB and IIB – from UAH 2.5 billion to UAH 2.1 billion.

In July-September, Ukrexim reduced its investments in domestic government bonds the most – UAH 2.45 billion, Sens – UAH 1.24 billion, Privat – UAH 0.7 billion, and First Investment Bank – UAH 0.48 billion.

Overall, PrivatBank remained the most profitable bank by a wide margin in the first nine months of this year, with UAH 43.37 billion, or 39.5% of the banking system’s net profit for the period.

In January-September, Oschad received UAH 14.18 billion in net profit, Raif – UAH 6.14 billion, FUIB – UAH 5.68 billion, Ukrsibbank – UAH 5.66 billion, Sens – UAH 5.58 billion, OTP Bank – UAH 4.75 billion, City – UAH 4.23 billion, and Ukrexim – UAH 3.60 billion.

Among the 12 banks whose net profit for the first nine months exceeded UAH 2 billion were Ukrgas – UAH 2.92 billion, Universal (mono) – UAH 2.86 billion, and Credit Agricole – UAH 2.29 billion.

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Ukraine ranks 20th in World Steel Association’s global ranking in August

In August this year, Ukrainian steelmakers increased steel production by 64.5% year-on-year to 602 thousand tons from 366 thousand tons.

At the same time, Ukraine took 20th place in the ranking of 63 countries that are major global producers of this product, compiled by the World Steel Association (Worldsteel).

According to Worldsteel, in August 2023, half of the top ten countries, except for Japan, South Korea, Germany, Turkey and Vietnam, recorded an increase in steel production compared to August 2022.

The top ten steel producing countries in August are as follows: China (86.41 million tons, up 3.2% by August 2022), India (11.904 million tons, up 17.4%), Japan (7.146 million tons, down 2.9%), the United States (6.980 million tons, up 1.1%), and the Russian Federation (6.4 million tons, up 8.9%), South Korea (5.583 million tons, down 5.9%), Germany (2.844 million tons, down 1%), Turkey (2.756 million tons, down 2.9%), Brazil (2.719 million tons, down 5.9%) and Vietnam (1.6 million tons, down 0.1%).

Overall, in August this year, steel production increased by 2.2% year-on-year to 152.619 million tons.

For the first eight months of 2023, the top ten steel-producing countries are as follows: China (712.930 million tons, up 2.6%), India (92.209 million tons, up 10.5%), Japan (58.366 million tons, down 3.8%), the United States (53.830 million tons, down 1.9%), and the Russian Federation (50.796 million tons, up 3.9%), South Korea (44.969 million tons, down 2.3%), Germany (24.328 million tons, down 4.2%), Turkey (21.599 million tons, down 12.1%), Brazil (21.335 million tons, down 8.3%), and Iran (19.672 million tons, down 1.1%).

In total, 63 countries produced 1 billion 256.378 million tons of steel in January-August, up 0.2% compared to the same period in 2022.

At the same time, Ukraine produced 4.032 million tons of steel in the first eight months of 2023, which is 22.3% lower than in January-August 2022. The country ranks 23rd in the first eight months of 2023.

As reported, in 2022, the top ten steel-producing countries were as follows: China (1.013 billion tons, down 2.1%), India (124.720 million tons, up 5.5%), Japan (89.235 million tons, -7.4%), the United States (80.715 million tons, -5.9%), and the Russian Federation (71.5 million tons, -7.2%), South Korea (65.865 million tons, -6.5%), Germany (36.849 million tons, -8.4%), Turkey (35.134 million tons, -12.9%), Brazil (33.972 million tons, -5.8%) and Iran (30.593 million tons, +8%).

In 2022, Ukraine ranked 23rd with the production of 6.263 million tons of steel (minus 70.7%).

In total, 64 countries produced 1 billion 831.467 million tons of steel in 2022, which is 4.3% less than in 2021.


VUSO insurer has affirmed its financial strength rating at “uaAA” grade

In January-June 2023, VUSO Insurance Company (Kyiv) collected UAH 1.188 billion in gross premiums, which is 79.8% more than in the same period of 2022, the rating agency Standard-Rating reported in information on the confirmation of the company’s financial strength rating at the level of “uaAA” on the national scale.

According to the information on the RA website, in particular, revenues from individuals increased by 65.08% to UAH 825.974 million, and from reinsurers – by 47.44% to UAH 12.863 million. Thus, the share of individuals in the insurer’s gross premiums in the first six months of 2023 amounted to 69.50%, and the share of reinsurers amounted to 1.08%.

Insurance payments sent to reinsurers in the first half of 2023 increased by 7.10% to UAH 93.399 million compared to the same period in 2022. Due to the higher growth rate of gross written premiums compared to insurance payments sent to reinsurers, the reinsurer participation ratio in insurance premiums decreased by 5.34 p.p. to 7.86%.

The company’s net written premiums increased by 90.89% to UAH 1.095 billion, and earned premiums – by 82.25% to UAH 1.031 billion.

VUSO paid UAH 438.689 million to its clients in the first half of 2023, which is 99.34% higher than the volume of insurance payments and reimbursements for the same period in 2022. Thus, the level of payments increased by 3.61 percentage points to 36.91%.

In the first six months of 2023, despite a negative result from operating activities of UAH 9.6 million, the company received a net profit of UAH 1.580 million.

As of the reporting date, the company’s assets increased by 52.38% to UAH 1.544 billion, equity showed an increase of 51.42% to UAH 575.652 million, liabilities increased by 52.95% to UAH 978.531 million, cash and cash equivalents increased by 4.60% to UAH 458.628 million.

The RA also notes that as of the beginning of the second half of 2023, the company has formed a portfolio of investments in domestic government bonds in the amount of UAH 163.740 million, which increased the level of provision of the insurer with liquid assets, which together covered 63.60% of the company’s liabilities.

In addition, the balance of funds in the insurer’s centralized insurance reserve funds (MTIBU) amounted to UAH 257.517 million, including UAH 192.244 million of additional guarantee premiums, which had a positive impact on the company’s liquidity.

VUSO Insurance Company was founded in 2001. The company holds 50 licenses: 34 – for voluntary and 16 – for compulsory types of insurance, and is represented in all regions of Ukraine. It is a member of MTIBU and USIF, a participant of the Direct Claims Settlement Agreement and a member of the Nuclear Insurance Pool.


National Bank has published rating of financial companies of Ukraine by revenue in first half of year

Finod LLC, which was engaged in currency exchange and recently lost all its licenses by the decision of the National Bank (NBU), was the largest financial company in Ukraine in terms of revenue – UAH 2 billion 115 million at the end of the first half of 2023.

According to data on the NBU website, in the first quarter the leader was payment system Novapay with UAH 1 billion 666 million in revenue, but its data is missing in the table for the half-year, while the table for the first quarter did not include Finod’s data.

The next three companies, as well as in the first quarter, were formed by microcredit providers Ukr Credit Finance LLC (CreditKasa TM), 1 Safe Agency for Necessary Loans LLC (MyCredit TM) and Investrum (ZeCredit, BananaCredit TM), whose revenue amounted from UAH 1.16 billion to UAH 0.86 billion.

At the same time, “Ukr Credit Finance” increased its revenue in the second quarter compared to the first quarter by almost 1.5 times, strengthening its position, while “1 Safe Credit Agency” by 28%, and FC “Investrum” – by 5%.

“Investrum” of the market leaders has the lowest labor costs – only UAH 10.8 mln, as well as close to zero profit.

Six more companies operating in the microcredit market, as well as the network of payment terminals of FC “Kontraktovy Dom” (TM “Easypay”) follow with rather close indicators of revenue – from UAH 651.6 mln to UAH 516.0 mln.

In particular, we are talking about LLC “Maniveo Fast Financial Assistance” (Moneyveo), which reported the highest salary expenses among competitors, FC “E Groshi Kom”, “Aventus Ukraine” (TM CreditPlus), , LLC “Miloan” – UAH 617.47 million and “Lineura Ukraine” (TM “Credit7”) and “Consumer Center” (TM “ShvidkoGroshi”).

The largest in terms of assets and profit in the first half of the year was state-owned PJSC Ukrfinzhytlo, capitalized at the end of last year at the expense of government bonds – UAH 55.5bn and UAH 3.3bn, respectively.


Fitch upgrades ProCredit Bank’s rating

The international rating agency Fitch Ratings has upgraded the VR of ProCredit Bank (Kyiv) from ‘cc’ to ‘ccc-‘ and affirmed its Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC-‘ and its Long-Term Local-Currency IDR at ‘CCC’.

“The upgrade reflects our view of ProCredit Bank’s moderately lower risk of failure, driven by stronger asset quality and profitability due to a less severe operating environment than previously expected,” the agency said in a statement on its website on Friday.

It added that the affirmation of the national long-term rating at ‘AA(ukr)’ with a ‘Stable’ outlook reflects the bank’s continued creditworthiness in the local currency relative to other Ukrainian issuers.

Fitch noted that ProCredit Bank’s IDRs are backed by the support of its parent ProCredit Holding AG & Co. KGaA (‘BBB/Stable Outlook’/bbb).

The agency added that the ‘ccc-‘ shareholder support rating reflects the view of the strategic importance of the Ukrainian bank for the holding, as well as potential limitations on the bank’s ability to use the parent company’s support, in particular, to service foreign currency liabilities.

It is noted that a default on priority foreign currency liabilities remains a real possibility due to the war, however, the bank maintains generally adequate foreign currency liquidity compared to its needs, which is facilitated by various capital and currency control measures introduced since the beginning of the war.

According to Fitch, ProCredit Bank will continue to service its external obligations: at the end of the first quarter of 2023, its external debt stood at a moderate 10% of total funding, consisting of EUR20 million of subordinated bonds and funding from international financial institutions.

The agency noted that the gradual improvement in the operating environment for Ukrainian banks has resulted in a more resilient loan portfolio quality for ProCredit Bank, as well as higher revenues and profitability than previously expected. As a result, although capital risks remain very high, Fitch believes that the bank is now less likely to face a material capital shortfall.

The agency recalled that ProCredit Bank’s asset quality indicators deteriorated sharply after the outbreak of the war, resulting in significant provisioning charges (3.4 times operating profit in 2022). “Risks to asset quality remain elevated and dependent on the outcome of the war, despite an improved operating environment in the first quarter of 2023,” Fitch stated.

It added that the bank earned UAH 211 million in net profit in the first quarter of this year after a net loss of UAH 1.8 billion in 2022, and expects an improvement in provisioning.

It is noted that the bank managed to increase its core capital ratio from 9.6% to 11.7% in the first quarter, but it remains modest.

ProCredit Bank was ranked 15th among 65 operating banks in Ukraine in terms of total assets (UAH 39.21 billion) at the beginning of June. Its net profit for the five-month period amounted to UAH 384.43 million.

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