KYIV, Feb 27 (Reuters) - Ukraine's central bank will
launch stress tests of commercial banks in April, more than a
year after Russia began its full-scale invasion, its governor
said on Monday.
Ukraine's economy shrank by about a third last year because
of the war but the country's banking system has withstood the
conflict, adjusted its operations and secured uninterrupted
payments to companies and residents.
"We will start evaluating banks from April," Andriy Pyshnyi,
the governor of the National Bank of Ukraine, wrote on Facebook.
"There are enough questions that need answers: the mission
of systemically important banks..., the role of state-owned
banks, issues of NPLs (non-performing loans) which resulted from
the war, support for the military industry, lending to MSMEs
(micro, small and medium-sized enterprises), the availability of
financial services..."
The central bank has said Ukraine's banking system is
operationally stable, liquid and profitable thanks to reforms
and efforts to clean up of the sector in previous years.
Banks' profits reached 24.7 billion hryvnias ($675.42
million) in 2022, down from 77.4 billion hryvnias in 2021.
The stress tests are intended to ensure Ukrainian banks are
better prepared for future shocks and set a timeframe for banks
to replenish their capital. They should also give an indication
of how long it will take to recover from the consequences of the
war.
The central bank said it expected the majority of banks
would be able to replenish their capital thanks to their future
profits but that some banks might require support from
shareholders.
Non-performing loans in banks' credit portfolios grew to
about 38% in the fourth quarter of 2022, it said.
"The banks need to focus on restarting lending and
supporting their business models in the conditions of the
prolonged war," the central bank said in a statement.
Ukraine has 67 commercial banks, with the state controlling
about 50% of the banking system.
(Reporting by Olena Harmash, Editing by Timothy Heritage and
Christina Fincher)
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