Page 81 - UKRRptDec23

Ukraine's banking sector is one of the few profitable sectors in the country and earned all-time high cumulative profits in the first eight months of this year of UAH 95.1bn ($2.5bn), according to National Bank of Ukraine (NBU) data, thanks to a comprehensive sector clean up that was completed before the war with Russia started.
The government is on the hunt for fresh sources of revenue after Ukraine’s funding is in increasing doubt thanks to mounting Ukraine fatigue and the US Congress’ reluctance to pass a $61bn funding bill for Ukraine proposed by US President Joe Biden.
A stop gap $300mn US funding bill for Ukraine was nixed by Congress during a recent vote, but the US announced this week that it had put in place a temporary $100mn package of military support. The EU is also dithering over a mooted four-year €50bn package that will be decided on in December.
The bank tax law temporarily raises the bank profit tax from its previous rate of 18% to a whopping 50% for the year 2023, but is due to be reduced to 25% in subsequent years.
The tax bill passed its first reading on October 19 and also includes a temporary income tax increase to 36% for the years 2024-2025. In 2023, banks are barred from offsetting losses from previous years against their current-year profits. However, this restriction will be lifted in 2024.
The Ministry of Finance anticipates that these measures will contribute significantly to government revenue, estimating a boost of UAH24-25bn ($650mn) in the budget for 2023 alone. In the years that follow, this annual contribution is projected to stabilize at UAH6-7bn.
In the third quarter of 2023, PrivatBank, a state-owned financial institution, continued to dominate Ukraine's banking sector with a net profit of UAH 13.624bn ($376mn) putting at the top of the ranking, Interfax Ukraine reports.
Following closely behind were two more state-owned banks: Oschadbank, with a net profit of UAH 7.338bn, and the nationalized Sense Bank, which reported a net profit of UAH 3.441bn.
Data from the National Bank of Ukraine reveals that the list of the top five banks with the highest net profit for the third quarter also featured two banks with foreign capital. Raiffeisen Bank reported UAH 3.017bn in net profit, while Ukrsibbank achieved a net profit of UAH 2.99bn.
The second half of the top ten included a mix of state-owned and foreign banks. State owned Ukrainian First Ukrainian International Bank (FUIB) generated UAH 2.004bn in net profit, and the foreign subsidiary OTP Bank recorded UAH 1.893bn. State-owned Ukreximbank reported a net profit of UAH 1.619bn, while two more banks with foreign capital, Citibank and Credit Agricole Bank, reported net profits of UAH 1.47bn and UAH 1.299bn, respectively.
Universal Bank, known as monobank, achieved a net profit of almost UAH 1.294bn for the third quarter, while Kredobank followed with a net profit of UAH
81 UKRAINE Country Report December 2023 www.intellinews.com