Page 46 - UKRRptJune18

8.1.1 Earnings
Largest bank registers tripling of profit in the first quarter of 2018.
Ukraine’s largest state-owned bank, PrivatBank, achieved UAH3.7bn of net profit in the first quarter of 2018 , which is a 3.3-fold rise year-over-year (UAH1.108bn), the bank reports. “In the first three months net commission income totalled UAH3.4bn... Net interest income came to UAH3.3bn. In the first quarter of 2018 , the bank earned UAH6.7bn of interest income thanks to the expansion of the loan portfolio of individuals by 6% (UAH2.5bn) and growth of the portfolio of corporate clients by 18% (UAH1.1bn),” the bank said. Nationalized in late 2016, PrivatBank in 2017 reduced its consolidated loss to UAH23.99bn from UAH176.64bn a year earlier.
Bank Credit Dnipro registers further losses . According its financial report, in the first quarter of 2018 , the bank, which is owned by oligarch Victor Pinchuk, lost UAH116.924mn, which is double the y/y figure. The bank’s assets decreased by 9.36%, to UAH8.417bn, while operating costs increased by 4%, to UAH127.942mn. The bank ranked 21st among 84 operating banks in the country as of 1 January 2018 in terms of total assets (UAH9.411bn), according to the National Bank of Ukraine.
8.1.2 NPLs
The share of non-performing loans (NPLs) in Ukraine's banking system grew by 1.8 percentage point (pp) to 56.4% in January-March, the National Bank of Ukraine (NBU) wrote in its latest review on the nation's banking sector published on May 8.
"The high NPL rate remains a major challenge to the banking sector, and this particularly concerns state-owned banks," the document reads. "The banks need to step up their efforts to workout NPLs, and finalize their NPL resolution plans for 2018."
The level of NPL at the major state-owned PrivatBank, nationalized in late 2016, stood at 87.6% as of early April.
In early January , the lender was among the sector leaders with NPLs at 87% of its loan portfolio. The share of NPLs in state-owned Oschadbank and Ukreximbank were 64% and 60%, respectively, while Ukrgazbank reported an NPL ratio of 22%.
Meanwhile, the regulator said in its May's review that in 2018, the banking sector could face risks associated, among other things, with suspended cooperation with the IFIs possible worsening of the economic expectations of households and businesses as a result. This, in turn, will impact lending and the banks’ pricing policies for assets and liabilities.
Consumer lending is expected to show steep growth in 2018. The banks will increase mortgage lending. However, its share in the banks’ new loans portfolio will not be significant. The NBU expects banks to boost hryvnia lending to the corporate sector as the financial standing of the real sector improves. The banks’ operating profits remained will virtually not change.
The NBU added that in 2018, the banks will implement the Liquidity Coverage Ratio (LCR) - a new liquidity requirement. "New rules for calculating regulatory capital, in particular the eligibility of its components, will be put in place," the document reads.
46 UKRAINE Country Report June 2018 www.intellinews.com