Page 37 - UKRRptMar20

a total of UAH28.3bn as well as big losses in June that year.
The rising profitability of the banks is allowing banks to write down bad debts and invest into their regulatory capital to improve their health. Regulatory capital of the sector has increased from UAH126,8bn in January 2016 to UAH150.3bn as of this January.
However, the even more important capital adequacy ratio (CAR) – the share of cash a bank keeps on deposit to meeting withdrawal demands – has risen from 12.3% to almost 20% over the same period.
The CAR ratio is one of the most important of banking numbers. Internationally banks have to keep a minimum of 8% of their assets in cash and the mandatory minimum in Ukraine is 10%. However, across emerging markets banks usually keep some 20% of their assets in cash in good times, as these markets are prone to shocks so banks only feel comfortable with a large cash-cushion. A falling CAR ratio is usually a clear sign of a brewing crisis or economic stagnation. The fact Ukraine’s CAR is already almost bank to 20% is a very positive sign.
And the highly successful clean up the sector started under former NBU governor Valeriya Gontareva will continue in 2020. This year, the central bank plans to conduct stress tests on 16 banks, down from 29 in 2019. The banks to be tested are: Savings Bank, Alfa Bank, Ukreximbank, FUIB, Universal Bank, Southern Bank, Tascombank, Megabank, A-Bank, Sberbank, Credit Bank Dnipro, Bank Vostok, MTB Bank, Investment Bank , Pravex Bank, and Forward Bank.
37​ UKRAINE Country Report​ March 2020 ​ ​www.intellinews.com