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NBU-controlled non-bank financial institutions in the total assets of the financial sector decreased by 0.4% to 11.8%. At the same time, during the specified period, the number of insurers' assets increased, despite the decrease in the number of companies. As for credit unions, the volume and number of their assets continued to decrease in the second quarter. Their loan portfolios decreased by 6% due to a sharp reduction in the volume of all financial services.
8.1.4 Bank news
Ukraine prepares the nationalization of financially weak banks. A new draft law creates the basis for the nationalization of systemically important banks in which the state suspects a worsening of solvency. The draft’s explanatory note indicates that nationalization is a much less expensive procedure for the state than classifying a bank as insolvent and subsequently withdrawing it from the market. The nationalization of a bank is not financially burdensome, and it also makes it possible to preserve the financial institution’s work and minimize the risks of the negative phenomena developing in the market. The draft law gives the state, represented by the Ministry of Finance, the right and upon a proposal from the National Bank, to participate in the withdrawal from the market of a systemically important bank that the central bank has classified as insolvent.
The National Bank of Ukraine has approved amendments to the charter of Alfa-Bank Ukraine on renaming it as Sense Bank, Roman Shpek, the head of the commercial bank's supervisory board, said. Alfa-Bank Ukraine's additional capitalization for $1bn at the expense of shareholders who fell under European sanctions is proposed to be carried out in the form of a "perpetual subordinated loan", said Shpek,
8.2 Central Bank policy rate
The National Bank of Ukraine has left the key policy rate unchanged. The Board of the National Bank of Ukraine has decided to keep its key policy rate at 25% per annum at least until the second quarter of 2024, reported the NBU. Under the current conditions, this key policy rate is sufficient to maintain exchange rate stability and keep inflation processes under control. At the same time, to meet these goals, it is crucial to enhance monetary transmission and further improve the attractiveness of hryvnia assets, on which the NBU is currently working. Therefore, according to the Deputy Chairman of the NBU, Serhii Nikolaychuk, the bank sees no reason to revise the official hryvnia exchange rate as there are other mechanisms and opportunities to ensure that the exchange rate is at the proper level.
53 UKRAINE Country Report October 2022 www.intellinews.com