The banking sector of Ukraine in 2017 posted UAH 24.4 billion of net loss, according to a February survey of the banking sector posted on the website of the National Bank of Ukraine (NBU).
According to the document, PrivatBank and two banks with Russian capital mainly saw the loss.
In 2017 the number of loss-making financial institutions fell to 18 from 33 in 2016, including those that had operating loss before sending funds to reserves – to 14 from 23.
The number of solvent banks last year was reduced to 82 from 96.
The director of the financial stability department of the central bank, Vitaliy Vavryschuk, said the operating profit of banks before the formation of reserves grew by 8%, while the increase in payments to reserves in the fourth quarter 2017 led to losses in the banking sector.
In his estimation, in 2018 the country’s banking sector will return to profitable activity.
“Our expectations for 2018. In our opinion, the banking sector is returning to profitable activity. We expect both an increase in the operating income of banks and a significant reduction in allocations to reserves. Yet most banks tried to leave their problems in the previous year. They reflected the real quality of the loan portfolio, having formed the appropriate reserves for it, in order to start the year of 2018 from scratch and show profitable activity,” the banker said.
He also said that at present the level of coverage of problem loans with reserves was about 85%. (Interfax-Ukraine/Business World Magazine)