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8.1.3 ​Banks specific issues
Eleven private banks want to join four state banks in participating in the “5-7-9%” program to extend low interest loans of up to $60,000 small and medium businesses​. In the first two weeks of the program, the four state banks – Oschadbank, Privatbank, Ukrgasbank and Ukreximbank – received about 1,500 applications and issued $1mn in loans, reports Economy Minister Milovanov. Under the formula, the more jobs created, the lower the interest rate. This year, 50,000 entrepreneurs are to borrow from an $800mn fund. Private banks applying to join the program are: FUIB, Raiffeisen Bank Aval, OTP, Alfa Bank, Pravex, Creditvest Bank, International Investment Bank, Alliance, Lviv Bank, Kredobank and Vostok.
In the latest liberalization of the foreign exchange market, the National Bank is allowing non-resident foreign banks to buy and sell hryvnia ​and to make settlements in Ukraine’s currency. “Foreign banks will be able to freely settle in UAHwith other foreign banks under foreign currency purchase and sale transactions,” reports the central bank.
This year, The central bank plans to conduct stress tests on 16 banks,
down from 29 in 2019. The banks 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.
With President Zelenskiy calling for 10% home mortgage rates this year,
Minister Milovanov said Monday the government is working on a program to offer “an affordable mortgage rate this year.” Zelenskiy argues that affordable mortgages will stem emigration and build a strong middle class. The National Bank of Ukraine says banks are reluctant to make mortgage loans for three reasons: the moratorium on foreclosing foreign currency loans, insecurity of creditors' rights, and opacity of the housing market.
Home mortgage rates should fall below 15% per annum this year,
Kateryna Rozhkova, first deputy governor of the National Bank of Ukraine, said. “Three reasons why banks do not want to issue mortgage loans are: a moratorium on the recovery of property on foreign currency loans, unprotected rights of creditors, and the non-transparent primary housing market," said the central bank officer. On Tuesday, President Zelenskiy said mortgages rates should fall to 10%.
Ukrgazbank opened in February a specialized mortgage unit, offering hryvnia loans of up to $200,000 for 20 years at 15.5%, ​the state-owned bank reports. Requiring a down payment of only 20%, the bank says it wants “to make affordable housing available to most Ukrainian families.” Of the 320 mortgages issued by the bank recently, 40% are for homeowners in Kyiv.
Ukraine is moving fast from cash to cards, reports the National Bank of Ukraine. In the last year, the number of card operations increased by 29%, ​to 5bn, and by 24% in volume, to the hryvnia equivalent of $146bn. Moving from ATM cards to payment cards, Ukrainians used 42mn cards to pay for $74bn in goods and services. For reference, Ukraine’s official GDP last year was $150bn.
44​ UKRAINE Country Report​ March 2020 ​ ​www.intellinews.com