Ukrainian banks have started posting the results of their stress tests conducted by the National Bank of Ukraine (NBU) on their websites. So, the state-owned PrivatBank and Ukrgasbank, as well as UkrSibbank, OTP Bank, Credit Agricole Bank, ProCredit Bank and Kredobank did not need additional capital according to the results of stress tests.
The estimated capital shortage of state-owned Oschadbank under the baseline scenario was UAH 13.49 billion, under the adverse macroeconomic scenario – UAH 28.25 billion, and by September 1, thanks to the measures taken, the bank had reduced it to UAH 6.19 billion and to UAH 21.14 billion, respectively.
The need in capital of state-owned Ukreximbank under the baseline amounted to UAH 9.776 billion, under the adverse macroeconomic scenario – UAH 17.53 billion; by September 1, the bank had decreased the figures to UAH 3.671 billion and to UAH 12.188 billion, respectively.
The estimated capital shortage of the subsidiary of the Russian Sberbank under the baseline scenario was UAH 1.44 billion, under the adverse scenario – UAH 4.759 billion. By September 1, as a result of the measures taken, the financial institution had no need for additional capital.
Raiffeisen Bank Aval, ProCredit Bank and OTP Bank (all based in Kyiv) have signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) and the European Union (EU) for the total amount of up to EUR 70 million in hryvnia equivalent under the SME (small and medium-sized enterprises) Finance Facility of the EU4Business initiative.
An Interfax-Ukraine correspondent has reported that the signing ceremony took place at the EBRD office on Tuesday.
In particular, Raiffeisen Bank Aval will receive a credit line with the limit of EUR 25 million in hryvnia equivalent, ProCredit Bank – EUR 20 million in hryvnia equivalent, and OTP Bank – EUR 25 million in hryvnia equivalent.
The total limit of the facility is EUR 120 million in hryvnia equivalent.
Solvent Ukrainian banks in January-August 2019 received UAH 44.29 billion in net profit, which is 3.2 times more than in the same period in 2018, the National Bank of Ukraine (NBU) has said. “More than half (58.3%) of this result was provided by the activities of state-owned PrivatBank,” the central bank said on its website.
According to the report, the banks’ income for the reporting period increased by 28.5%, to UAH 164.99 billion, expenses by 5.2%, to UAH 120.7 billion.
Based on the previously released data, in August the net profit of Ukrainian banks grew by 1.9 times, to UAH 7.57 billion: income rose by 20.8%, to UAH 23.59 billion, while expenses by 2.5%, to UAH 16.02 billion.
The National Bank explains the growth of the banks’ profitability for the eight months of this year by four factors: the growth of net interest and commission income of the banks by 18%, to UAH 53 billion and by 15%, to UAH 28.4 billion respectively, a positive result from revaluation and purchase and sale operations with UAH 14.9 billion, as well as a low volume of the banks’ payments to reserves with UAH 8 billion against UAH 14.4 billion for the eight months of 2018.
The net profit of solvent banks in Ukraine in January-June 2019 amounted to UAH 31 billion, which is 3.7 times more than in the same period last year (UAH 8.3 billion), the NBU said on its Facebook page.
The NBU pointed to three factors of growth in bank profits: a 20% increase in net interest income of banks, to UAH 39 billion, a growth in net commission income by 17%, to UAH 21 billion, and a positive result from revaluation and from transactions on currency sale and purchase – UAH 10.4 billion.
According to the NBU, there were 76 operating banks in Ukraine as of July 1, 2019.
Capital returns of banks in 2019 would considerably exceed 20%, which is the contingent standard for banking sectors of emerging countries, Director of the Financial Stability Department Vitaliy Vavryschuk said at the presentation of the financial stability report on Tuesday.
“In [the first] five months, the profit is already more than for entire 2018 [in January-May 2019, the net profit of banks was UAH 23.4 billion]. We are confident that capital returns of banks in 2019 would considerably exceed 20%, which is the contingent standard for banking sectors of emerging countries. We do not see any risks to profitability in subsequent quarters,” he said.
According to Vavryschuk, banks should use high profits to form the capital stock. In the coming years, capital requirements will be toughened substantially: it will be necessary to form capital conservation and systemic importance buffers (for systemically important banks), as well as to cover operational and market risks with capital (now only credit risk is covered with capital),” he said.
The net profit of Ukrainian banks, not taking into account insolvent ones, in January-March 2019 totaled UAH 13.167 billion, which is 51.8% more than a year ago, according to a posting on the website of the National Bank of Ukraine (NBU).
Revenue of Ukrainian banks over the period grew by 28.6%, to UAH 58.006 billion.
Expenses of the banking system in January-March 2019 accounted for UAH 44.839 billion, which is 23.1% more than a year ago.
The NBU wrote on its Facebook page that there are three factors for the growth of the banking system’s profit in Q1 2019: growth of net interest income of banks by 18%, to UAH 19.5 billion, growth of net commission income of banks by 18%, to UAH 9.9 billion and foreign exchange revaluation profit of UAH 3.8 billion.
According to the NBU, as of April 1, 2019, a total of 77 banks operated in Ukraine.