Solvent banks in Ukraine in January-March 2023 received UAH 34 billion in net profit against UAH 152 million loss in the same period of 2022, the National Bank of Ukraine said on Friday.
“The main factors of the sector’s profitability are the growth of income as a result of the gradual resumption of banking activities and relatively insignificant volumes of additional provisioning,” it pointed out on its website.
Only five banks out of 65 in the first quarter were unprofitable with an aggregate loss of UAH 40 million.
According to the NBU, in March, the net profit of banks rose to 12.58 billion UAH from 6.78 billion UAH in February.
It is pointed out that banks for the quarter increased operating income by 48% year-on-year, including net interest income rose by 41% year-on-year, despite a significant increase in interest expenses as a result of higher interest rates on deposits.
Net fee and commission income for the period, according to the NBU, increased by 20% compared to the result of the first quarter of 2022.
In March compared to February, net interest income increased by 40.4% to 38.16 billion UAH, net commission income – by 14.7%, to 23.7 billion UAH, while interest expenses increased only by 17.4% – to 7.93 billion UAH, and commission expenses even decreased by 15.8% – to 3.02 billion UAH.
“Banking volumes are resuming with the gradual resumption of economic activity, including after the shelling of energy infrastructure in late last year – early this year,” the regulator stated.
It added that the banks’ profitability is also boosted by the positive result of currency buying and selling operations, which was 2.3 times higher year-on-year in the first quarter.
Net operating profit before deductions to reserves doubled in 1Q 2023 year-on-year – to UAH 45.9 billion, while the rate of deductions to reserves against losses from asset transactions fell compared with 1Q of the previous year in 5.6 times, in particular in reserves against loans – 10 times.
During the quarter the deductions increased only by UAH 3.81 billion, including UAH 1.29 billion in March, and in total since the beginning of a full-scale invasion of Ukraine by Russia, banks formed reserves for credit losses of UAH 108 billion.
The National Bank states that the return on equity sector on April 1, 2023 amounted to 58% against -0.25% a year ago.
The profit tax accrued for the quarter – UAH 6.72 billion – exceeded the corresponding annual figure for the historically most profitable year 2021, the regulator said.
