Business news from Ukraine

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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Financial Committee proposes to introduce new tax on banks

The Parliamentary Committee on Finance, Taxation and Customs Policy is preparing a draft law on additional taxation of net interest income or excess profits of banks, which is likely to come into force in 2024 and bring UAH 10 billion to the budget annually, Committee Chairman Danylo Hetmantsev told Forbes Ukraine.

“It’s not an easy question, we are still evaluating it,” Deputy Governor of the National Bank Serhiy Nikolaychuk commented on the proposal on Facebook.

It is noted that parliamentarians are considering two options for taxation: a tax on all net interest income received for the year at a relatively small or medium rate, or a tax on the difference between net interest income in the reporting year and the average value for the last three to four years.

“For example, in Spain, it is 4.8%,” Mr. Hetmantsev said, referring to the first option.

He clarified that in this country, net commission income of banks is also taxed. “But this is not our story: banks have not yet reached the pre-war level in this regard,” the head of the Financial Committee said.

Commenting on the second option, Mr. Hetmantsev noted that the rate should be high. “For example, in Lithuania, 50% of the difference between net interest income in the base year and its average value over the previous four years is taxed at 60%,” he explained.

According to the committee chairman, the option of taxing all net interest income earned during the year is more optimal.

Mr. Hetmantsev added that he proposes to introduce this tax temporarily: from January 1, 2024, for two years.

He noted that the main motivation for the innovation is the need for additional funding for defense spending.

According to the head of the Finance Committee, the draft law is ready, and after consultations with the Ministry of Finance, the National Bank, specialized associations and the President’s Office, it will be submitted to the Verkhovna Rada.

Mr. Hetmantsev added that there have been no consultations with the market yet. “Although it is not difficult to predict the position of banks,” he said.

As reported, the profit of operating Ukrainian banks in January-June 2023 amounted to UAH 67.65 billion, while the banks ended the same period last year with a net loss of UAH 4.65 billion. This figure is a record high for the first half of the year: the previous highest net profit for the first half of the year was in 2019 – UAH 31.04 billion, compared to UAH 23.79 billion in 2020 and UAH 30.08 billion in pre-war 2021.

According to the NBU, net interest income increased by 40.8% to UAH 93.62 billion in the first half of 2023, commission income by 22.3% to UAH 25.60 billion, and the result from revaluation and purchase and sale transactions increased by 35.8% to UAH 16.30 billion.

Record profits also allowed banks to pay a record corporate income tax in the first half of this year – UAH 12.44 billion, compared to UAH 1.21 billion in the first half of last year and UAH 2.5 billion in pre-war 2021.

In an op-ed in NV on Friday, National Bank Deputy Governor Sergiy Nikolaychuk reiterated the regulator’s position that accusations of overpayment on certificates of deposit are “fundamentally false, manipulative, and dangerous.” He emphasized that the main goal is to achieve price stability and tie up the high liquidity of the banking system caused by the war.

According to him, in the first 7 months of this year, the NBU paid UAH 48.6 billion on certificates of deposit, compared to UAH 40.3 billion last year and UAH 6.3-10.7 billion annually in 2015-2021, but the average daily balance on certificates of deposit increased to UAH 411.4 billion by August this year, from UAH 215.7 billion at the end of 2022 and UAH 145.4 billion at the end of 2021.

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In the first quarter, the number of bank branches in Ukraine declined to 5.192 thousand

The number of outlets of Ukrainian banks in the first quarter of 2023 decreased by 2.7%, or by 147, to 5.192 thousand, according to the website of the National Bank of Ukraine (NBU).

According to it, in January-March this year, most of all outlets closed Raiffeisen Bank – 27 and A-Bank – 10, then in their networks were 323 and 205 outlets, respectively.

Ukrbudinvestbank reduced the number of outlets by 6 – to 44, Sense Bank and FUIB – by 5, to 138 and 221, respectively, and Ukrsibbank – by 3, to 230.

Among the smaller banks the largest decrease of the network was registered in the bank “Clearing House” – from 5 to 3 branches, Evroprombank – from 6 to 5, and in the bank “Concorde” – from 14 to 12.

Taskombank opened the most number of outlets in the first quarter of this year – 3, increasing their number to 93.

Kredobank and Cominbank added 2 branches to their networks, increasing their number to 67 and 52 correspondingly.

On the whole, the pace of reduction in the number of bank branches in the first quarter of this year slowed down to 2.7%, as in the fourth quarter of the previous year it was 3.3%, in the third – 7.9% and in the second – 8.1%.

This is largely due to the fact that state banks have probably heeded the call of the National Bank, which in February this year suggested that the Finance Ministry, as the owner of state banks, introduce a moratorium on reducing their branch network during the war.

Over the past year, it was reduced in Oshchadbank by 420 business units – to 1.182 thousand, PrivatBank – by 287, to 1.21 thousand, Ukrgazbank – by 51, to 217, and Ukreximbank – by 5, to 48. In the first quarter of this year, Oshchadbank even opened one branch, while PrivatBank closed only one.

According to the NBU, as of April 1 this year in Ukraine, the largest branch networks owned by PrivatBank – 1209, Oschadbank – 1183, Raiffeisen Bank – 323, Ukrsibbank – 230, FUIB – 221, Ukrgasbank – 217, A-Bank – 205, Accordbank – 143, Credit Agricole Bank – 141 and Sense Bank – 138.

State banks at the beginning of April 2023 accounted for 51.2% of all bank branches in Ukraine, which corresponds to the situation before the war, although at the end of last year their share decreased slightly – to 49.8%.

As earlier reported, the number of structural subdivisions of Ukrainian banks in 2022 decreased by 20.2%, or by 1,349 branches, to 5.336 thousand.

Ukrainian banks’ profits more than doubled in January-February

The profits of Ukrainian banks in January-February 2023 amounted to 21.5 billion UAH, which is 2.2 times more than during the same period in 2022 (9.9 billion UAH), the press service of the National Bank of Ukraine (NBU) said on Tuesday.
The regulator noted that bank revenues for the two months increased by 33% to 65.8 billion UAH, and expenses – by 12%, to 44.3 billion UAH.
At the same time, the fee and commission income increased twofold, to 15.582 billion UAH.
The result of revaluation and purchase and sale operations increased 2.4 times up to UAH 4.649 billion against UAH 1.9 billion during the same period last year.
At the same time, deductions to the reserves decreased 2.3 times, to UAH 2.517 billion, and commission expenses went down by 11.9%, to UAH 7.5 billion.
As reported, the Ukrainian banks in 2022, net profit reduced by 3.1 times – to 24.716 billion UAH compared with 77.376 billion UAH in 2021.

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Profit of Ukrainian banks in January-November 2022 amounted to almost 20 billion UAH

The profit of Ukrainian banks in January-November 2022 amounted to UAH 19.429 billion, which is 3.4 times less than in the same period of 2021 (UAH 65.728 billion), the press service of the National Bank of Ukraine (NBU) said.
According to the report, the profit of Ukrainian banks in November amounted to UAH 8.451 billion, which is 2.3 times more than a month earlier (UAH 3.6 billion).
The regulator noted that the income of banks in November increased by 12.2%, while expenses increased by 9.7%.
According to the regulator, the income of banks in January-November increased by 32% against the same period last year – up to 322 billion UAH.
At the same time fee and commission income for 11 months decreased by 8.4% – to UAH 76.46 billion (while during the same period last year it increased by 32.6%).
At that the result from revaluation and from sale-purchase operations was positive and made UAH 42.3 billion, while it was negative and amounted to UAH 2.7 billion for the same period last year.
At the same time expenses of banking system for January-November 2022 increased by 1.7 times compared with this index in 2021 – up to UAH 302.6 billion, including deductions to reserves – 13.6 times, up to UAH 113 billion. At the same time, the commission expenses increased by 1.6% up to UAH 31.99 billion,
As reported, the Ukrainian banks in 2021 doubled the net profit – up to 77.5 billion UAH, compared with 41.3 billion UAH in 2020.

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National Bank presented a complete list of leading banks and outsider banks at end of June

The leader in increasing the volume of public deposits in June was the state-owned PrivatBank, which increased them by UAH 21.08 billion, or 6.6%, over the month.
As reported on the website of the National Bank of Ukraine (NBU), another representative of the state, Oshchadbank, follows: the absolute inflow of public funds to it amounted to UAH 5.74 billion, and the relative inflow was 4.2%.
At the same time, if at Privat the number of depositors increased by 68.03 thousand, including currency depositors – by 35.98 thousand, then at Oshchad the number of depositors decreased by 30.5 thousand. with an increase in currency by 2.8 thousand
The largest increase in the number of depositors in June was shown by the Ukrainian Universal Bank (monobank) – 114.91 thousand, including currency depositors – 48.15 thousand. With such an increase in depositors, the increase in deposits amounted to 2.6%, or UAH 1.16 billion, which ensured the bank the fourth position.
Banks with foreign capital – Ukrsibbank and Raiffeisenbank, in which 40% and 30% respectively belong to the European Bank for Reconstruction and Development (EBRD), took third and fifth place. Deposits in them increased in June by UAH 1.59 billion, or 3.8%, and by UAH 1.09 billion, or 2%, respectively, and the number of depositors increased by 20.6 thousand. and 10.1 thousand
On the other side of the list is Alfa-Bank, deposits in which in June decreased by UAH 943.5 million, or 2.2%, including currency deposits – by UAH 699.5 million, or 3.4%. At the same time, the number of depositors increased by 13,140, ​​which is probably due to the bank’s card product and a good exchange rate for it.
In addition, UAH 386.7 million, or 1% of the funds of natural persons, was left in June by FUIB. He also had the largest part of the outflow – UAH 224.7 million – on currency deposits.
The outflow of funds from Accordbank amounted to UAH 124.3 million, or 6.8%, from Vostok Bank – UAH 103.7 million, or 2%.
Rounding out the bottom five is A-Bank, whose deposit volume in June decreased by UAH 74.7 million, or by 0.8%. At the same time, the increase in depositors was 59.08 thousand. – it came third, second only to monobank and PrivatBank, and far ahead of the trailing TASkombank with 22.68 thousand. new depositors.
In general, according to the data of the NBU, in June the funds of individuals in banks increased by UAH 30.36 billion, or by 3.5% – almost all due to hryvnia deposits, since currency deposits increased by only UAH 0.17 billion, or by 0 ,1%.
Data on the volume of deposits and the number of individual depositors in Ukrainian banks as of 07/1/22 and their dynamics in June (Ukrainian)

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