Page 51 - UKRRptSept23

● Carrying out stability assessment, including AQR and stress testing of banks ● Insurance of military and political risks
● Introduction of a comprehensive recovery system, settlement of insolvency, and withdrawal from the market of insolvent institutions (EU Bank Recovery and Resolution Directive)
Among the indicators the availability of non-performing loan (NPL) settlement tools, ensuring the financial and institutional capacity of the National Commission on Securities and the Stock Market, regulation of the virtual assets market, implementation of legal regulation of investment accounts, and activities of rating agencies in compliance with EU requirements are also mentioned among the indicators. Implementing the strategy also provides the formation of a road map for the restoration of financial services in the de-occupied territories.
The yield on deposits in Ukraine is growing, and lending is recovering. In the second quarter, due to the NBU's measures, banks will continue to increase interest rates on time deposits. According to the bank, on average, the return on three-month individual deposits increased by 1.6 percentage points to 14%. The rate for 12-month hryvnia deposits in the second quarter increased by 1.3 percentage points to 15.2% per annum. Commercial rates also increased to 14.1% per annum. The regulator notes the trend toward the country's lending recovery, which indicates the economy's recovery. Thus, the retail loan portfolio in the second quarter increased for the first time since the beginning of the full-scale invasion, by 4.5%. Mortgage lending volume also increased as a result of the eOselya program. The commercial portfolio decreased in April and May but increased in June. During the second quarter, interest rates on personal loans decreased slightly to 28.5% per annum, and on business loans, they fluctuated at about 20% per annum.
The non-bank financial sector in Ukraine is slowly recovering, and credit unions have managed to increase their assets. This has happened for the first time in two years, according to a review of the non-banking financial sector for the second quarter of 2023. The volume of life insurers' assets during the reporting period increased for the second quarter in a row by 4%. At the same time, risk insurers' assets decreased slightly. The insurance market remains profitable. The return on capital for risk insurers is commensurate with previous years (6%), and life insurers recorded a record quarterly profit. As well, the almost two-year decrease in credit union assets stopped in the second quarter. Assets grew slowly in most credit unions, and at the end of the quarter, they had only reached 60% of their pre-war level. New loans grew by almost a third in the quarter for the second quarter in a row. The most notable are private loans for real estate construction, repair, and reconstruction. Due to this, the loan portfolio increased slightly by 5%. However, a significant share of loans in the portfolio remain overdue for more than 90 days.
51 UKRAINE Country Report September 2023 www.intellinews.com