Business news from Ukraine


The Motor (Transport) Insurance Bureau of Ukraine (MTIBU) as of October 1, 2020 placed 72.6% of the hryvnia funds of the centralized insurance reserve fund for protection of road accident victims at four state banks.
According to a report on the MTIBU’s website, there are UAH 324.3 million on deposits in Ukreximbank, UAH 147 million in Oschadbank, UAH 267 million in Ukrgasbank, and UAH 24.750 million in PrivatBank.
In addition, Kredobank has UAH 94.2 million on deposits, Credit Agricole Bank some UAH 9.120 million, OTP Bank some UAH 42.9 million, TAScombank some UAH 95.794 million, FUIB some UAH 5.3 million, Alfa-Bank some UAH 7.6 million, and Pravex Bank some UAH 33.7 million.
In addition, as of September 30, 2020, the money of the centralized insurance reserve fund for protection of road accident victims in hryvnia-denominated government domestic loan bonds amounted to UAH 559.3 million and foreign currency government bonds some $ 107.087 million.

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Ukraine has announced a tender for the development of three more hydrocarbon deposits, including Hrunivske (Sumy and Poltava regions), Okhtyrske (Sumy, Poltava and Kharkiv regions), and Ichnianske (Chernihiv region) on the basis of production sharing agreements (PSA).
The corresponding announcements about the tender were published in the Uriadovy Kurier newspaper on August 3.
The area of Hrunivske deposit is 1,083 square kilometers, that of Okhtyrske some 672 square kilometers, and Ichnianske some 2,086 square kilometers. According to the terms of the tender documentation, approved at the end of 2018, the winners on the first and second fields will have to ensure the drilling of at least two exploratory wells and conduct 3D seismic surveys during the first stage of exploration (the first five years). The winner on the third lot will have to ensure the drilling at least three wells and conducting 3D seismic surveys.
The minimum investment for Hrunivske and Okhtyrske deposits is UAH 500 million UAH, and that for Ichnianske some UAH 900 million.
The PSA is valid for 50 years. The state’s share in profitable products should be at least 11% of its total volume, the maximum share of compensation products, due to which the investor will be reimbursed for his expenses, is 70% of the total production. Applications for participation in the tenders are accepted within three months from the date of publication of the announcement of the tenders.

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The National Bank of Ukraine (NBU) has started publishing data about individuals’ deposits in banks in terms of their amounts and the currency of the deposits, as well as the amount of possible refunds by the Deposit Guarantee Fund.
“The information is first published by banks on their websites until the end of the month following the reporting month, and then in aggregated format on the National Bank’s website in the Statistics – Banking System Indicators section, the NBU said on its website.

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Ukrainian banks expect that lending and inflow of deposits continue in 2019, they also count on improvement of the loan portfolio, according to the poll on the conditions of banking lending conducted by the National Bank of Ukraine (NBU). According to a report posted on the central bank’s website, three quarters of the banks surveyed predict growth in corporate loans in 2019, 62% of respondents – the growth of consumer loans.
Some 66% of respondents predict the continuation of the inflow of deposits from the public in 2019, 67% – the inflow of business funds.
“The value of deposits is the highest in the entire history of observations,” the NBU said.
In the fourth quarter of 2018, the demand for loans continued to increase both from the public and business, due to the growing needs of enterprises in funds for capital investment and replenishment of working capital, as well as debt restructuring. At the same time, the business was mainly interested in short-term hryvnia loans.
In the fourth quarter of 2018, banks somewhat increased the standards for approving applications for all types of business loans along with deteriorating expectations, primarily for the exchange rate and economic development, as well as increased collateral risk. However, in the first quarter of 2019, banks plan to slightly relax domestic business lending requirements, especially for loans to small and medium-sized enterprises.
Consumer lending contributed to growth in the retail loan portfolio in the fourth quarter of 2018. The demand for respective loans was linked to an improvement in consumer confidence and a rise in spending on durable goods.
Standards for loans issued to households have not changed.
According to the report, banks, for the first time in five quarters, noted a decrease in liquidity risk.
“Banks expect that credit, currency and operational risks will increase in the first quarter of 2019, liquidity risks will decrease, interest rates will not change,” the NBU said.
The survey was conducted from December 18, 2018 to January 10, 2019 among the loan managers of 61 banks, which share of the total assets of the banking system is 96%. The next survey on bank lending will be about expectations for the second quarter of 2019 and will be published in April.

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