Page 41 - bne IntelliNews Country Report: Ukraine Dec17

8.0 Financial & capital markets 8.1 Bank sector overview
Ukrainian banks reported aggregate net profit of UAH3.25bn ($125m) in the third quarter of 2017 following a UAH6.0bn loss in the second quarter of 2017, thus bringing 9M17 net profit to UAH1.4bn. Total CAR stood at 15.3% at end-the third quarter of 2017, +2.3pp q-o-q and +2.6pp YTD. NPLs (IFRS) totaled 56.4% at end-the third quarter of 2017, -1.3pp q-o-q and +2.5pp YTD.
While the sector’s health is improving customers are still very wary of banks . A study published by Razumkov’s Center of Social Research, a public policy think tank, on October 23 shows that more than 75% of Ukrainians do not trust the National Bank of Ukraine.
At the same time the state’s share of the banking sector has grown enormously since the leading state-owned Russian banks were pushed out of the sector. Ukraine’s four leading state-owned banks — PrivatBank, Oschadbank, Ukreximbank, Ukrgazbank — increased their overall share of bank deposits by 2.7% up to 56.4% since January, or UAH494bn, according to finbalance.com.ua news website.
The banking system’s return to net profitability in the third quarter of 2017 was driven by halved LLR charges and growth in net interest income and net fee income (both +10% q-o-q).
Out of the 88 performing banks, 71 were profitable and 17 loss-making in 9M17 (state-controlled Privatbank and subsidiaries of state-owned Russian banks incurred the highest losses).
CAR increased q-o-q (15.3% in the third quarter of 2017), with regulatory capital up 22% q-o-q to UAH113bn ($4.3bn ), reflecting a July capital injection into Privatbank for UAH22bn.
NPLs dropped q-o-q on continued NPL write-offs (yet remained sizable overall at 56.4%, depressed by Privatbank’s 86% and other state-owned banks’ 58% NPL share).
All in all banks are benefiting from decreased deposit interest rates and already-recognized impairment provisions.
Monetary and banking indicators
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017E
Monetary base, UAH bln
187
195
226
240
255
307
333
336
382
397
Monetary base, chg. yoy
32%
4%
16%
6%
6%
20%
8%
1%
14%
4%
Money supply (M3), UAH bln
515
487
598
683
773
909
957
994
1,103
1,158
Money supply, chg. yoy
30%
-5%
23%
14%
13%
18%
5%
4%
11%
5%
41 UKRAINE Country Report December 2017 www.intellinews.com