Page 51 - UKRRptDec18

Monetary and banking 2010 2011 2012 2013 2014 indicators
2015 2016
Jan-Sep 2017
Non-performing loans, USD bn 57.23 63.90 67.87 81.48 70.48 64.53 63.00 65.93
Non-performing loans ratio 14.8 15.2 29.6 14.5 15.9 25.6 30.4 56.4
Total deposits, USD bn 608.3 741.5 831.3 984.7 729.5 415.0 380.6 362.4
Loan-to-deposit ratio 175% 162% 143% 135% 152% 151% 127% 119%
Capital adequacy ratio 20.6 19.2 18.0 18.1 15.6 9.2 13.0 13.8
Liquid asset ratio 18.8 18.6 22.1 20.6 26.4 33.0 48.5 53
8.1.1 Earnings
Ukrainian banking sector could reach profitability in 2018 for the first time since 2013 , according to first deputy governor of the National Bank of Ukraine (NBU) Yekateryna Rozhkova. The nation's banking sector increased its profit by seven times to UAH14.8bn ($525mn)in January-October. In October alone, the country's banks saw a profit of UAH3.9bn, Rozhkova wrote in her Facebook page on November 28. According to the banker, the reason for the return to profitability in 2018 was a significant increase in both interest and commission income of the banks, as well as record low expenses for formation of reserves: for the ten months the sector formed reserves worth UAH21.4bn, or a 25% decline year-on-year. According to NBU data, net losses of Ukraine's banking sector stood at UAH24.4bn in 2017 . The result was attributed to the performance of battered PrivatBank, nationalised in late 2016, and four other "large-scale banks". The NBU did not provide names of these four lenders though. At the same time, Kyiv-based financial analysts believe that the loss was mainly formed by nationalised PrivatBank and some largest subsidiaries of Russian lenders. Over the past four years, Ukraine's central bank has transformed the entire banking sector of Ukraine after years of massive fraud. The NBU has withdrawn the licences of more around 100 banks, many of them due to their involvement in money laundering, stealing depositors’ money or for having a non-transparent ownership structure.
In January-September, Ukrainian banks made UAH 10.9bn ($386.9mn) -- an 8-fold increase.
ROE reached a healthy 12% in the first half of the year, while the banking sector earned a net profit of UAH8.3bn. Banks benefit from the rise of net interest margins as deposit rates show little growth despite the continuing cycle of rate increases.
Retail lending in the national currency is growing at 40% y/y due to the low basis of comparison and improved of consumer expectations. Banks will focus on consumer lending and loans to SME due to the lack of creditworthy large borrowers and overall unwillingness to work with large corporates.
51 UKRAINE Country Report December 2018 www.intellinews.com