The challenging economic situation in the country took its toll on the value of the domestic currency, the financial standing of banks, enterprises and organizations, as well as the wellbeing of the population.

In January-February 2015, the Ukrainian banks suffered losses of UAH 74.5 billion due to the hryvnia depreciation and the need to build up loan loss provisions for loans to borrowers whose solvency had deteriorated.

Since the start of the year, the loss-making performance of the Ukrainian banks has led to a fall of UAH 71.3 billion in the regulatory capital and a worsening of other prudential ratios and performance indicators of banks.

However, not all the banks have incurred losses in the current year. Under the aforementioned unfavorable conditions, those banks that pursue a policy of streamlining their income and expenses prove successful. In January through February, banks reported an increase in net commission and trading income, as compared with the same period last year. In contrast, general administrative expenses had decreased.     

With a view to creating conditions to ensure a sound performance of the Ukrainian banks, the Board of the National Bank of Ukraine has issued several resolutions, including Resolution No 129 On Some Issues of Banks' Activities that obliges banks to carry out a proper assessment of the risks arising from debtors/counterparties' failure to meet their obligations and build up loan loss provisions to the full extent required to cover possible losses. At the same time, banks will not be targeted by corrective measures if they have violated prudential requirements due to the build-up of provisions and/or revaluation of accounts in foreign currency due to an appreciation of the exchange rate of foreign currencies against the domestic currency.

Banks that have violated prudential requirements are required to develop and submit to the National Bank of Ukraine by January 1, 2019, a detailed plan containing measures to eliminate these violations. As part of the efforts to devise these plans, banks and their shareholders will explore all the options to increase the bank's capitalization and improve the quality of their assets.

The aforementioned measures are expected to enable it to gradually stabilize the banking sector.