Problem loans in Ukrainian banks shrank by UAH 56B - NBU

The National Bank of Ukraine (NBU) wrote about this on its Telegram channel, Ukrinform reports.

"The volume of problem loans in Ukrainian banks decreased by UAH 56 billion in January-September 2021. The share of non-performing loans (NPLs) reduced from the beginning of the year by 7.7 percentage points, from 41.0% to 33.3%," the report says.

The National Bank notes that this is the best result since the beginning of 2017, when NPL volumes have been determined according to the updated methodology. The quality of loan portfolios has improved in banks of all groups. The best result in banks of foreign banking groups (excluding Russian banks) was less than 8%. The share of NPLs in the portfolios of banks with private commercial capital decreased to 10.5%. This almost corresponds to the target level of 10% by the end of 2024, envisaged in the NBU's Institutional Strategy.

State-owned banks have shown the best result: they have reduced NPLs by UAH 35 billion since the beginning of the year, but still accumulate more than 70% of the banking sector’s NPL portfolio.

State-owned banks continue to implement NPL reduction plans approved by the Financial Stability Board. This is a necessary precondition for increasing their investment attractiveness and one of the structural beacons of Ukraine's cooperation program with the IMF.

In 2020, the share of NPLs in the Ukrainian banking sector decreased by UAH 87 billion to UAH 310 billion. In January-June 2021, state-owned banks reduced their NPL portfolio by 5% to UAH 295 billion.

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