Page 49 - UKRRptSept19

8.0 Financial & capital markets 8.1 Bank sector overview
The banking sector is back in profit and beginning to grow. However, the issue of NPLs and the high cost of borrowing remain the main problems.
8.1.1 Earnings
Through July, net banking profits hit $1.5 billion, almost four times the level of the first seven months of last year. According to the National Bank of Ukraine, revenues increased by 30%, to the hryvnia equivalent of $5.6 billion. Expenditures increased by 6%, to $4.1 billion.
Bank lending will be helped by a near quadrupling of bank profits, to $1.2bn, during the first half of this year, compared to the same period last year. “For the second year in a row, banks are making high profits, mainly due to the rapid development of consumer lending, which is growing by about 30% year on year,” Kateryna Rozhkova, first deputy governor of the central bank, said in a press release. “We estimate that in the medium term, high operating efficiency and profitability will continue.” After half of the nation’s banks were closed after the 2014 financial crisis, Ukraine now has 76 banks, 66 of them profitable.
Leading bank net profits are generally up for the first half y/y. With profits converted to dollars, here some leaders: Alfa-Bank (Kyiv) up 2.3 times, to $36mn; Ukrgasbank up 28%, to $11mn; Oschadbank up 4-fold, to $5mn; and Raiffeisen Bank Aval down 13%, to $89mn.
49 UKRAINE Country Report September 2019 www.intellinews.com