TRENDS OF THE BANKING SECTOR OF UKRAINE

Анотація

The banking sector of Ukraine entered the crisis with a significant reserve of capital and liquidity, resistant to operational risks and effective, with action plans developed by the banks in case of adverse events. The macroprudential policy of the National Bank of Ukraine prepared the banking sector well for crisis phenomena. With the beginning of the full-scale war in Ukraine, the NBU introduced regulatory relaxations for banks in order to facilitate their effective work. The article analyzes the dynamics of the main monetary policy instrument of the National Bank of Ukraine – the discount rate. In June 2022, the NBU decided to increase the discount rate to 25% in order to ensure exchange rate stability and curb inflationary processes. This level of the discount rate will make it possible to support hryvnia incomes and savings of the population, and the attractiveness of hryvnia assets. The main trends in the development of the banking sector over the past few years and months of the intensification of military operations have been studied. Banks with a state share have the worst quality of loan portfolio, PJSC CB "Privatbank" is the unchanging leader, non-performing loans of this bank as of January 1, 2018 accounted for 87.64% of its loan portfolio and 39.7% of all non-performing loans in the banking sector. Banks managed to maintain their operating profitability at a high level, but the banking sector was unprofitable in the first months of the war, and the quality of the loan portfolio deteriorated. In these conditions, it is important that the National Bank of Ukraine responds promptly and flexibly to changes in market conditions, as well as strengthening financial monitoring of banks' activities. For banks, it is necessary to ensure timely preparation and submission of reports to the NBU, informing the regulator about the risks of violation of requirements for financial indicators; improvement of credit risk assessment approaches to commensurate them with the depth of the current crisis; improvement of cyber protection systems; adaptation of business models to current operating conditions.

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