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Net loss of banks in March amounts to UAH 10.07 bln – NBU
KYIV. April 29 (Interfax-Ukraine) – The net loss of Ukrainian banks in January-March 2022 amounted to UAH 160 million due to a net loss in March in the amount of UAH 10.07 billion, while in January-March 2021 the profit amounted to UAH 9.91 billion, the press service of the National Bank of Ukraine (NBU) said on Friday.
According to the report, this result is due to the fact that with the beginning of a full-scale Russian invasion of Ukraine, banks introduced credit holidays and reduced commissions for using their services, which affected their interest and commission income. In particular, the growth rate of net interest income in March slowed down to 17% year-over-year, while in January-February this indicator grew by 35%, while net fee and commission income decreased by 13% in the first quarter due to falling in March by 58%.
At the same time, the net operating profit of banks before deductions to reserves in the first quarter amounted to UAH 22.23 billion, which is 1.6 times higher than in the first quarter of 2021 (UAH 13.69 billion).
According to the NBU, the negative financial results of banks in January-March 2021 determined the significant volumes of reserves formed against expected losses due to the consequences of the war, in particular, the fact that banks formed reserves for UAH 21.57 billion in the quarter, including in March – by UAH 15.86 billion.
The press release said the overall decline in business activity and falling demand for loans and banking services will continue to negatively affect the profitability of banks. Losses from credit risk are expected, given the gradual impact of the economic crisis on the activities of borrowers, so it will be possible to assess the impact of the war on the capital of banks only after time passes.
"It is very important for the National Bank to see the real state of affairs in the banking system. Therefore, whatever the losses after the war, we urge the banks not to hide them by "decorating" reporting. Without this, it will be difficult for us to implement an effective plan for the recovery of the banking system after the victory," deputy head of the board of the National Bank Yaroslav Matuzka said.
As of April 1, 2022, out of 69 solvent Ukrainian banks, 44 were profitable and received a net profit of UAH 5.85 billion, 25 were unprofitable with a loss of UAH 6.01 billion.
