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National Bank of Ukraine Approves List of Banks for Stress Testing in 2019

5 February 2019

Press Release

 

The National Bank of Ukraine (NBU) has approved the Terms of Reference for resilience assessment of banks and the banking system of Ukraine in 2019 and has outlined a list of banks that will be stress tested in 2019.

 

Resilience as of 1 January 2019 will be assessed. The resilience assessment includes the asset quality review (AQR), and, additionally, stress testing for the largest banks. 

 

The asset quality review is mandatory for all banks. In 2019, the AQR will take place at 76 of 77 institutions that have the banking license (Rozrakhunkovyi Center PJSC  that conducts only settlement transactions does not undergo the resilience assessment).

 

In 2019, 29 banks that account for 93% of the banking system will undergo stress testing in addition to the AQR. These 29 banks  were rated as the largest ones as of 1 November 2018 by three indicators: risk-weighted assets (40%), retail deposits (50%), and retail loans (10%).

 

Thus, the following banks will undergo stress testing in 2019:

PrivatBank

Oschadbank

Alfa-Bank

Raiffeisen Bank Aval

Ukreximbank

FUIB

Ukrgasbank

UkrSibbank

OTP Bank

Credit Agricole Bank

Pivdennyi JSB

Tascombank

KredoBank

Sberbank

ProCredit Bank

Uкrsоtsbаnk (stress testing findings will be considered with due account for the ongoing takeover by Alfa-Bank JSC)

Megabank

Bank Credit Dnipro

Universal Bank

A-Bank

Prominvestbank

Idea Bank

Bank Vostok

MTB Bank

Bank for Investments and Savings

Industrialbank

Globus Bank

International Investment Bank

Forward Bank

 

Further information on macroeconomic scenarios and approaches to stress testing in 2019 will be released separately on the NBU’s website.

 

According to the resilience assessment findings, the regulator will determine the required levels for the regulatory capital adequacy ratio (N2) and the common equity adequacy ratio (N3). The required level of the capital adequacy ratios will be estimated in order to ensure banks’ compliance with the minimum requirements of N2 and N3 according to the baseline scenario (10% and 7%, respectively) and less strict requirements to the said ratios under the adverse scenario (5% and 3.5%, respectively) throughout the entire forecast period.

 

The NBU Board approved these approaches by Decision No. 97-D On Approval of the Terms of Reference for Resilience Assessment of Banks and the Banking System of Ukraine in 2019 that was signed and entered into effect on 5 February 2019.

 

Please be reminded that, last year, the NBU conducted its first in a series of annual resilience assessments. The findings show that the banking sector is sufficiently capitalized but that it should increase the safety margin in order to enhance resilience to possible crises in the future. For more details on the findings of the last year’s resilience assessment please go to.

 

Further information on the resilience assessment findings with a breakdown by banks will be released on the NBU’s website.

 

For reference

 

In 2018, the NBU has launched resilience assessment of banks that includes stress testing a list of banks defined by the NBU. Stress testing estimates indicators of the bank’s financial reporting (of the balance sheet and the profit and loss statement) and the required level of capital for three years after the reporting date under the baseline and adverse scenarios.


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Last modification   05.02.2019