The National Bank of Ukraine (NBU) will continue to study the possibility of issuing its own digital currency – e-hryvnia, the NBU has said, with reference to the results of a pilot project in which the regulator released a limited amount of electronic hryvnia, operations using which were tested by working groups with the participation of the regulator, volunteer companies and the World Bank.
According to the results of the pilot project, the National Bank believes that e-hryvnia can be considered as an alternative to the available means and instruments of retail payments, including cash, payment orders, payment cards and electronic money. The advantages of e-hryvnia are ease of use, availability, security (redemption and payments are guaranteed by the National Bank) and the speed of payments.
The electronic hryvnia can be considered as the so called disruptive technology, since it can potentially significantly change the ecosystem of the payment market of Ukraine and redistribute the existing roles of market participants.
The National Bank of Ukraine (NBU) has started the second stage of the resilience assessment of banks – the asset quality review (AQR) confirmed by an external auditor and started stress testing of 29 banks, according to a survey of the banking sector posted on the website of the NBU.
According to preliminary estimates, the number of banks requiring capital injections in the baseline and negative stress test scenario will decrease compared to the previous year, the central bank said in the survey.
As the regulator recalled, by the end of 2019, banks need to form a capital conservation buffer in the amount of 0.625%. It will become mandatory for each bank from the beginning of 2020, when the first stage of the introduction of the capital conservation buffer will begin. In the future, the size of the buffer will increase gradually every year and will reach 2.5% from January 1, 2023. The formation of the corresponding buffer will ensure that banks create a stock of capital in excess of the minimum requirements. In the future, this will provide an opportunity of absorbing the possible losses that may arise in a general economic recession, without violating the capital adequacy ratio.
The NBU also announced that during the second quarter the method for determining systemically important banks will be changed and an updated list of such banks will be made public. In the future, the NBU will require them to form a buffer of system importance.
As reported, in 2019, 29 banks that account for 93% of the banking system will undergo stress testing in addition to the AQR. These 29 banks were rated as the largest ones as of November 1, 2018 by three indicators: risk-weighted assets, retail deposits, and retail loans.
The following banks will be tested: state-owned PrivatBank, Oschadbank, Ukreximbank and Ukrgasbank, private Alfa-Bank, Raiffeisen Bank Aval, FUIB, UkrSibbank, OTP Bank, Credit Agricole Bank, Pivdenny Bank, TAScombank and Kredobank. The list also includes Sberbank, ProCredit Bank, Ukrsotsbank (the results of stress testing for the bank will be assessed taking into account the dynamics of its joining Alfa-Bank), Megabank, Credit Dnipro Bank, Universal Bank, A-Bank, Prominvestbank, Idea Bank, Bank Vostok, MTB Bank, Bank of Investments and Savings, Industrial Bank, Bank Globus, International Investment Bank and Bank Forward.
According to the resilience assessment findings, the regulator will determine the required levels for the regulatory capital adequacy ratio (N2) and the common equity adequacy ratio (N3). The required level of the capital adequacy ratios will be estimated in order to ensure banks’ compliance with the minimum requirements of N2 and N3 according to the baseline scenario (10% and 7%, respectively) and less strict requirements to the said ratios under the adverse scenario (5% and 3.5%, respectively) throughout the entire forecast period.
In 2018, the NBU has launched resilience assessment of banks that includes stress testing a list of banks defined by the NBU.
Assets of the National Bank of Ukraine (NBU) in January-March 2019 fell by 2.7%, reaching UAH 1.021 trillion, the central bank published in the Holos Ukrainy parliament’s newspaper on Tuesday.
The NBU said that in the first quarter, the amount of nonresidents’ securities in assets increased 2.9%, to UAH 445.701 billion, avoirs and special drawing rights (SDR) decreased 54.6% during this period, to UAH 46 million
The amount of deposits and deposits in foreign currency and banking metals decreased 23.2%, to UAH 89.572 billion.
In the structure of liabilities, the amount of funds from state and other institutions decreased 16.8%, to UAH 39.690 billion, the National Bank’s liabilities to the International Monetary Fund decreased 1.8%, to UAH 76.093 billion.
The National Bank of Ukraine (NBU) will send part of its profit for 2018 in the amount of UAH 64.878 billion to the national budget, Head of the NBU Council Bohdan Danylyshyn wrote on his Facebook page, referring to the decision of the NBU Council. “The Council decided to approve the distribution of profits of the National Bank of Ukraine for 2018 in the amount of UAH 64.878 billion in the following areas: the formation of total reserves of net worth of the National Bank of Ukraine – UAH 3.566 billion; obligations of the National Bank of Ukraine to the national budget of Ukraine for 2018 year – UAH 64.878 billion,” he wrote.
As reported on the website of the NBU, the main components of the profit of the central bank are the interest profit, as well as the results of operations with financial assets and liabilities in foreign currency and financial tools.
Net interest income after the release of reserves for 2018 is UAH 34.9 billion (in 2017 – UAH 45.2 billion). In 2018, the result of currency revaluation for the first time since 2013 became negative due to the strengthening of the hryvnia exchange rate to foreign currencies and amounts to UAH 2.2 billion. A positive result from the revaluation of debt securities at fair value is UAH 6.7 billion (in 2017 – UAH 2.7 billion). Administrative expenses of the NBU and costs associated with the manufacture of banknotes, coins and other products amount to UAH 3.78 billion (in 2017 – UAH 3.59 billion). Also in 2018, funds secured for legal obligations, including lawsuits, in the amount of UAH 2.1 billion were released.
The schedule for transferring part of the NBU profit for 2018 to the national budget will be agreed with the Finance Ministry of Ukraine, the NBU said.
The National Bank of Ukraine (NBU) will reduce the refinancing rate to 17.5% from 18% from April 26, 2019, NBU Governor Yakiv Smolii has said at a briefing.
“The board of the National Bank decided to lower the refinancing rate to 17.5% per annum from April 26. Currently, a steady downward trend in inflation towards the 5% target allows the National Bank to begin the cycle of reducing the refinancing rate,” he said.
The National Bank of Ukraine (NBU) gives an opportunity to open accounts to new non-resident entities on the financial market of Ukraine, including foreign investment foundations and asset managers acting on behalf of such investment foundations, reads a posting on the NBU website.
The right to open accounts in Ukrainian financial institutions and carry out forex transactions through them by non-resident legal entities is ensured by the law of Ukraine on currency and currency operations and the law amending some laws of Ukraine on investment promotion, as well as the EU-Ukraine Association Agreement.
The NBU has updated the instruction on the procedure of opening and closing customer accounts in banks and correspondent accounts in banks for residents and non-residents.
The central bank’s board approved the new version of the document by instruction No. 56 amending some laws and regulations of the National Bank of Ukraine on April 1, 2019. The document was posted on the website of the NBU and came into effect on April 4, 2019.
The instruction regulates the procedure of opening and closing by banks of:
– client accounts of residents and non-residents (individuals and legal entities);
– correspondent accounts of residents and non-residents;
– accounts of international financial institutions and their managers under trust agreement.
The NBU said that the facilitation of the procedure of opening client accounts envisaged by the instruction will have a good effect on the business climate in Ukraine due to the cancellation of the requirement to provide samples of signatures by clients when opening bank accounts. From now on account management will be performed on grounds of the list of entitled persons without notarial certification. In addition, change of name of a legal entity will not entail closing of active accounts.