Page 43 - bne IntelliNews Country Report: Ukraine Dec17

to shrink. We expect a positive trend in lending to be sustained for the rest of 2017 and in 2018.”
8.1.3 Deposits
Deposits are returning to the system and this year customers have already deposited UAH22.4bn ($832mn) into banks , according to Igor Levchenko, head of UkrsibbankbnP Paribas’ personal banking department.
Hryvnia and F/X corporate accounts rose 0.7% m/m and fell 4.4% m/m, respectively . Retail deposits, both hryvnia and F/X, were little-changed last month.
Interest rates remained unchanged in October, with new hryvnia retail deposits paying 10.7% p.a. on average (-3.5pp YTD) and F/X deposits averaging 2.9% (-2.2pp YTD).
8.1.4 Banks specific issues
The National Bank of Ukraine (NBU) has annulled its resolution adopted in 2015, which introduced the relaxation of requirements for banks during a financial shock to the system or economy, Interfax news agency reported on November 27. Among these factors were the sharp worsening of the economic situation, the large devaluation of the national currency, Russia's illegal annexation of Ukraine's Crimea and Moscow-backed military uprising in the Donbas region. Over the past year and a half, the NBU has continued to gradually ease capital controls imposed by the government in the wake of the economic crisis in the country. The central bank imposed capital controls in 2014, when the currency and economy went into meltdown, and is able to ease the measures now the situation has stabilised. "The annulment [of the resolution] is linked to the fact that the negative consequences of this impact have already been identified by the banks and taken into account in their action plans to bring their performance indicators to the regulatory requirements that are being observed," the NBU said in a statement. The resolution allowed Ukrainian banks not to apply punishment measures to banks for violation of economic requirements for the minimum size of regulatory capital; regulatory capital adequacy linked to the revaluation of accounts in foreign currency and banking metals after the devaluation of the hryvnia after February 6, 2015 and the creation of reserves for possible losses under active bank transactions. The relaxation also covered the requirements for current liquidity, short-term liquidity, the maximum amount of credit exposure per counteragent, large credit risks, the maximum total amount of credits, guarantees provided to insiders, and the limit for total short open currency position. At the same time, for banks that still lead their performance indicators to regulatory requirements within the framework of their action plans developed pursuant to the resolution, a moratorium on the application of measures for violating these indicators and restrictions on the implementation by certain banks of certain types of banking operations was extended, the NBU added.
43 UKRAINE Country Report December 2017 www.intellinews.com