Banking system of Ukraine set world record in size of troubled loans, - National Bank

Source : 112 Ukraine

The issue of the troubled loans was at the sharpest in July (58%) and then began to decrease step by step
16:47, 18 December 2017

The banking system of Ukraine set up a world record in the size of the troubled loans in 2017. Vitaly Vavryshchuk, the Director of Financial Stability Department of the National Bank of Ukraine claimed this as Ukrainian News reported.

‘We set the unpleasant and expensive record for the economy: the highest share of the non-performing loans of all time of the world’s observance is spotted in Ukraine. However, this problem is already solved, the bank formed the reserves and they do not put pressure on the capital. We think that the banks should solve the issue of the troubles loans by the clearance, refunding or write-off’, Vavryshchuk noted.

Related: National Bank of Ukraine expects arrival of IMF mission in January 2018

He noted that the issue of the troubled loans was at the sharpest in July (58%) and then began to decrease step by step.

‘The key inner risks of the bank sector are changeless during the last few years: the domination of the state banks and prominent share of the troubled loans in the banks’ portfolio. The strategy of the development of the state bank sector should be finalized in the near future and any delay leads to the losses in the budget for the cover of the future losses of the state banks’, the NBU report noted.  

Related: Fitch: Ukrainian banking sector could return to profit in 2018

According to Vavryshchuk, the banking system is enough capitalized and about 50 banks possess capital ratio higher than 25%.

As we reported that the substantial delay of the provision of Ukraine with the next tranche from the International Monetary Fund (IMF)  is the main risk to the financial stability.

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