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Ukrainian banks post UAH 4.65 bln net loss in H1 2022
KYIV. Aug 11 (Interfax-Ukraine) – The net loss of the Ukrainian banking sector in the first half of 2022 amounted to UAH 4.65 billion due to the formation of reserves for expected losses from the consequences of the war, the National Bank of Ukraine said.
"In the second quarter, the sector’s net loss reached almost UAH 4.5 billion. The growth rate of net interest income slowed down from 35% in January-February to 19% in March-June in annual terms," the regulator said.
Taking into account its previously published statistics, in June the net loss increased by UAH 3.34 billion compared to a net profit of UAH 6.12 billion in May and a net loss of UAH 7.27 billion and UAH 10.07 billion, respectively, in April and March.
As of July 1, 2022, out of 68 solvent banks, 47 banks were profitable and received a net profit of UAH 10 billion, 21 were unprofitable with a loss of UAH 14.6 billion, the regulator specified.
It pointed out that the negative financial result of the first half of the year determined the significant volumes of reserves formed for expected losses due to the consequences of the war: banks formed reserves for UAH 57.9 billion, of which UAH 52.1 billion in March-June.
In particular, in June, contributions to reserves increased by UAH 18.67 billion compared to UAH 6.47 billion in May, UAH 11.17 billion in April and UAH 15.84 billion in March.
"The realization of credit risk as a result of a full-scale war has led to the loss of the banking sector for the first time in the last five years. Provisions for credit losses will continue to grow. To maintain operational efficiency, banks must adapt their business models to work in crisis conditions, as well as properly reflect financial indicators to maintain the financial stability of the banking sector," NBU Deputy Governor Yaroslav Matuzka said.
The NBU notes that all major banks offered "loan vacations" to borrowers, some financial institutions temporarily lowered rates on consumer loans, which led to a sharp reduction in interest income in the retail segment.
The regulator added that suppressed demand for banking services is limiting banks’ commission income: net commission income declined by 35% y/y in March-June compared to a 15% y/y growth in January-February.
At the same time, according to the NBU, the operating result of banks remained positive: net operating profit before provisions for the second quarter amounted to UAH 33.5 billion compared to UAH 23.5 billion in the same period in 2021.
