The share of non-performing loans (NPLs) in Ukraine’s banking system in 2019 was below 50% for the first time in three years, having shrunk to 48.4% as of January 1, 2020.
“Loan portfolio quality improved across all bank groups, except for banks with Russian capital,” the National Bank of Ukraine (NBU) said on its website.
The main improvement factors were the following: an increase in retail lending (by about 30% YoY); major credit portfolio restructuring of two state-owned banks of over UAH 30 billion ($1.2 billion); major efforts by banks with foreign capital to optimize portfolios by selling and writing down NPLs on the account of loss allowance; and appreciation of the hryvnia, Ukraine’s national currency.
“Today, the share of NPLs remains high, however it poses no major risks to the financial sector, since the coverage ratio exceeds 95%,” the regulator added. (UNIAN/Business World Magazine)