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8.0 Financial & capital markets 8.1 Bank sector overview
Ukraine’s banking sector had a strong year in 2023, ending with a cumulative UAH85.5bn profit, despite taking a UAH44bn hit in December when they were forced to pay a 50% one-off tax on profits.
And the sector is on course to have the same strong year in 2024, earning UA16.8bn in January, ahead of last year’s UAH14.9bn in the same month, and UAH9.1bn in February giving a cumulative total for the first two months of the year of UAH25.9bn, ahead of the UAH21.5bn in the first two months of last year.
The tax burden on bank profits is a more moderate 25% this year, which is still higher than pre-war.
Non-performing loans (NPLs) have improved as well with a sharp drop in retail NPLs and a stabilisation in corporate bad debt. Overall, NPLs are 36.7% for the sector as whole, as the quality of the loan portfolio continues to improve.
PrivatBank continues to be the black sheep of the flock, but there too NPLs have fallen from around 90% when the bank was nationalised in 2016 to under 50% for the first time in February. Foreign owned and privately owned banks have NPLs of 16% and are the best performing in the sector.
Both consumer and corporate loans are starting to rise again after plummeting
59 UKRAINE Country Report April 2024 www.intellinews.com