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public money that was injected into the bank at the time of its nationalisation, which will immediately cause it to collapse and be nationalised again as a systemically important bank.
Ukrainian president Volodymyr Zelenskiy has been vague on the fate of Privatbank, but more recently, after the International Monetary Fund (IMF) froze its negotiations on a new Extended Fund Facility (EFF) the president has come out more forcefully to say the bank will not be returned to Kolomoisky.
The overall health of the bank sector is improving as regulatory capital and capital adequacy ratio (CAR) are improving. Regulatory capital rose again to UAH146,820mn in November from UAH143,946mn a month earlier. CAR was up too from 18.43% in October to 18.59% in November – well ahead of the mandatory 10%. In general in volatile emerging markets bankers like to keep their CAR in the 20s and Ukrainian banks are on their way back to that norm.
8.1.1 Earnings
As Ukraine’s banks recover from the 2014-2015 crisis, bank profits hit $2 billion for the first nine months of this year, up 4.4 times y/y, reports the National Bank of Ukraine.
Of the nation’s 76 operating banks, 66 are profitable. Over the summer, retail lending was a hot sector, increasing 30%, compared to July-September 2018. In the third quarter, hryvnia deposits of individuals were up 12.7% y/y.
Despite National Bank’s interest rate cut to 15.5% last month, 12-month retail deposits enjoy an average annual interest rate of 15.8%. The central bank attributes this high level to competition among banks.
Drilling into the details and profits are well ahead of previous years. The
46 UKRAINE Country Report December 201 www.intellinews.com
