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8.1.1 Earnings
Ukraine's solvent banks reported profits up four-fold to $490mn in Jan-Aug. Revenues of solvent banks in Ukraine increased by 7.3%, while their expenses shrank by 1.4%. Ukrainian solvent banks in January-August 2018 received UAH13.747bn ($490mn) in profit, which was up 4 times from UAH3.429bn ($122mn) year-over-year ( y/y). Revenues of solvent banks over the period under review grew by 7.3% y/y, to UAH128.440bn ($4.6bn), while expenses dropped by 1.4%, to UAH114.693bn ($4bn), according to the National Bank of Ukraine (NBU). Ukraine's banking system posted a total of UAH24.4bn ($869.6mn) in losses in 2017 due to the significant amount of allocations for the country's reserves.
8.1.2 NPLs
The share of non-performing loans in Ukraine's banking system shrank to 55.06% in July 2018 from 55.68% in June 2018. The amount of such loans at the beginning of August rose to UAH631.2bn ($22.30bn) from UAH626.1bn ($22.12bn) at the beginning of July, the National Bank of Ukraine said on its website. Read also Ukraine repaying debts: $160mn transferred to IMF UNIAN memo. Non-performing loans accounted for 54.5% of loans issued by Ukrainian banks as of January 1, 2018. Their amount was UAH595bn ($20.02bn). A non-performing loan is a sum of borrowed money upon, which the debtor has not made the scheduled payments for a period of usually at least 90 days for commercial banking loans and 180 days for consumer loans.
8.1.3 Bank news
The EBRD will provide a local currency loan of up to UAH324mn (€10mn) to Ukraine's OTP Leasing owned by Hungary's OTP Bank, for long-term leases to small and medium-sized enterprises (SMEs) across the country. SMEs will also benefit from grant funding of up to €1 million available under the European Union (EU)’s EU4Business initiative, which helps small firms to invest and benefit from the Deep and Comprehensive Free Trade Area (DCFTA) between Ukraine and the EU, according to the EBRD's statement e-mailed to bne IntelliNews on September 12. "By joining the EBRD programme, which is linked to the DCFTA, OTPL and its clients will also benefit from expert advice in the form of training and support provided by consultants," the statement reads. The grants will be provided as investment incentives to eligible SMEs to reduce the cost of their capital expenditure on upgrades of technology and production processes in line with EU standards and regulations.
Ukraine’s biggest lender PrivatBank, nationalised in December 2016, has agreed to repay UAH1.1bn ($39mn) of bailed-in deposits to the country's businessmen Ihor and Hryhoriy Surkis , who are close associates of the bank's ex-owner oligarch Ihor Kolomoisky. Earlier, Ukrainian businessmen Surkis won a legal battle against the bail-in of their deposits of UAH1.1bn during the nationalisation of PrivatBank. The funds were deposited at PrivatBank by members of the Surkis family, whom the NBU recognised as alleged related parties of the bank, owned before its nationalisation by oligarchs Kolomoisky and his partner Hennady Bogolyubov. "Over UAH1bn has been already recovered," Interfax news agency quoted unnamed source on September 24. PrivatBank's media office clarified the same day that the
42 UKRAINE Country Report October 2018 www.intellinews.com