The share of bad and non-performing loans (NPL) today is around 50% of the total loan portfolio of Ukrainian banks, Director of the financial stability department of the National Bank of Ukraine (NBU) Vitaliy Vavryschuk said.
“We have revealed during stress tests that the share of these loans is around 50%,” he said.
Vavryschuk said that this figure was considerably smaller in the official statistics earlier published by the NBU.
He said that the NBU in Q1 2017 would switch to the new format of presenting data about NPL. The central bank will take into account overdue period criteria (90 days and more) and change the NPL notion harmonizing it with best practice. By the end of the quarter the NBU would first publish data about NPL in the new format.
“The loans that were not serviced for 90 days and more or loans, payments on which are not overdue but unlikely to be returned, will be placed to the category of NPL,” he said.
He said that the share of loans with overdue payments of over 90 days and more was 27% of the corporate loan portfolio as of late 2016, and it could grow to 46% in H1 2017. Loans of PrivatBank that are not serviced will be added to this category.
The share of loans with overdue payments of over 90 days and in individual loan portfolios is around 56%.
Vavryschuk said that the NBU expected that the share of NPL would gradually be reduced in 2017 as the economy recovers. (Interfax/Business World Magazine)
