Share of non-performing loans in Ukrainian banks decreasing - NBU

In October, the share of non-performing loans in Ukrainian banks decreased from 45.6% to 43.4%.

The National Bank explains that a significant reduction was possible due to the work of state-owned banks on clearing their balance sheets of troubled assets. In October, the state-owned PrivatBank wrote off UAH 38 billion in non-performing loans, for which 100% of reserves had previously been formed. As a result, the share of problem assets in PrivatBank decreased from 79.2% to 76.7%. Other state-owned banks are also continuing to improve the quality of their portfolios. In October, the share of NPLs in their portfolios decreased from 43.5% to 42.9%.

The write-off of problem loans is one of the main measures within the three-year plans to reduce the share of problem loans in state-owned banks.

As reported, in late June 2020, the Financial Stability Council approved the plans developed by state-owned banks, which provide for a reduction of UAH 305 billion in the NPL portfolio within the next three years.

In September, the share of NPLs in the banking sector decreased from 48.1% to 45.6%.

In 2019, the share of NPLs in Ukrainian banks fell below 50% for the first time in recent years and amounted to 48.4% as of January 1, 2020. (- 4.5 p.p. in 2019).

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