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In January 2017, the banking system of Ukraine showed a profit of 338 million UAH. Almost sensational news, given that in January 2016 there was a loss of 890 million UAH, and in January 2015 - 8.5 billion UAH. In January 2013, the profit of the banking system was at the level of 560 million UAH. It can be said that Ukraine’s banking system has finally left the unprofitable line that has been pursuing it for the past three years.
This is an accounting loss, and as a result, the main factor here was the size of the formed reserves for problem loans. They also formed huge accounting losses of the banking system over the past years. But this does not mean that we now have less problem loans.
Unfortunately, in January 2017 the share of problem loans was 28% of all loans that had been issued. In January 2014, this figure was 10%. But by the end of 2016 problem loans were partially written off and once again changed the method of forming reserves for such loans. As a result, they reduced the size of the reserves and finally "got" the desired profit on the banking system. As for other items of income and expenditure of the banking system, it is worth noting that in January 2017 the banking system received an income of 484 million UAH from foreign exchange operations, but we remember the loss of more than 1 billion a year ago. The devaluation of hryvnia earlier this year helped banks to earn extra money. But interest on loans, on the contrary, decreased. In January 2017, the total amount of banks’ interest received for loans decreased by 6%.
Now commission fees are very important for banks, because they form the main income. Therefore, the development of non-cash payments and the use of payment cards by the population is the main goal of the Ukrainian banking system. In conditions when crediting does not work, it is exactly operations with cards and credits on cards that help banks very much. Therefore, recently, many banks are actively offering consumer loans. Indeed, the rates are high, but for consumer loans rates are always high, since these are quick and unsecured loans, which means - high-risk loans.
But banks simply do not have a choice. After the "reforms" the banking system cannot function properly. All these problem loans, the idle market of interbank loans, the dominance of the "black currency market," and the banks' endless nervousness as a result of "cleaning" of their ranks lead to the fact that banks do not give loans to either business or the population. As a result, banks now have a large surplus of free money. The indicator of instant liquidity for January 2017 is 60% with a standard of 20%. But there is no way to lend normally, and only high-risk consumer loans remain as an instrument. This is the paradox of our banking system. And there is a lot of money, and there is a desire to lend, but there is no possibility in these conditions, which the NBU created for the banking system of Ukraine. Even banks with EU owners are now in shock. They just do not know what to do in Ukraine with such a banking system. We have to survive.
Indeed, there is an opportunity and a great desire this year to launch lending to the economy. To do this, there are all the prerequisites, but so far there is no support, or rather, competent steps from the NBU. Banks want and can lend to the economy, but they need clear and understandable rules without any exceptions and chaos. You cannot demand from banks to work according to EU type, as the economy of Ukraine is far from the EU economy. But it is impossible to give loans through state-owned banks in the manual mode and call it lending to the economy of Ukraine. Here it is necessary to do it correctly, so that it would be beneficial for banks and customers.