Page 49 - UKRRptJun20

PrivatBank
85.66
82.36
78.66
state banks ex-PrivatBank
60.59
50.59
51.73
Foreign owned
43.45
39.18
33.27
Privately owned
24.8
21.75
18.59
Insolvent
55.58
53.12
0
Source: NBU
Non-Performing Loans remain the banking sectors bete noir, but at the table and charts show some progress is being made.
Just under half of all Ukraine’s bank loans are non-performing, but after the bank sector clean up of the last years 90% of those loans are provisioned and so pose no immediate danger to banks stability.
However, due to the political uncertainty even before the current crises began, bank managers are extremely reluctant to extend loans to corporate clients. Its a case of the companies that banks want to lend to don’t need the money, while the companies that want to borrow, the banks don’t trust.
A lot more work needs to be done on improving corporate governance, transparency and property rights before banks will play much role in the country’s economic growth.
The NPLs are not evenly spread with state owned banks accounting for a lot more of the bad debt than private banks. And from the state owned banks, the largest share of NLPs is at PrivatBank, that was looted by its owners over a five year period until it was nationalised in 2016.
While Privatbank has posted strong profits this year to date, the sheer size of the NLPs on its books means it will take years to clean the bank up entirely.
49​ UKRAINE Country Report​ June 2020 ​ ​www.intellinews.com