The banking sector of Ukraine has demonstrated the high level of reliability and resilience to global and domestic threats of the financial crisis. The policy pursued by the National Bank of Ukraine seeks to combine a conventional strategy for sustainable development of the banking system with efficient yet sound monetary regulatory measures. It has ensured the reliability of banking services, stability of the national monetary unit, rapid growth of the banks' deposit portfolio in hryvnia, and helped spur the country’s economic growth. Ukrainian banks have become attractive to potential foreign investors.
This is a summary of what was said by First Deputy Governor of the National Bank of Ukraine Borys Prykhodko who participated in a panel discussion entitled “Financial sector of Ukraine: Developments and Prospects” along with representatives from the world's leading investment companies and top level executives in the banking industry. The panel discussion was held as part of the 1st International Annual Business Conference “ABC: Ukraine & Partners”.
According to Mr. Borys Prykhodko, Ukrainian banking system has proved its ability to deliver strong performance amid the instability in global financial markets, contribute to the country's economic growth and operate profitably.
“The the financial results delivered by the banking sector this year speak for themselves”, emphasized the First Deputy Governor of the National Bank of Ukraine.
Mr. Borys Prykhodko has unveiled encouraging financial results of the financial sector. In 2012, return on equity of Ukrainian banks stood at 3%, comparable to the level observed in the advanced euro area countries. The National Bank of Ukraine has simplified access to refinancing loans and cut interest rates thereon. The cost of major refinancing transactions has been defined close to the policy rate, which stands at 7%. In 2012, the total assets of the banking sector had grown by UAH 56 billion. Over the first five months of 2013, they have increased by UAH 41 billion.
The cost of lending has been on a downward trend. The average weighted interest rate on loans in the national currency has declined from 18% to 16% year-to-date.
The situation with non-performing loans is showing signs of improvement. Over the first four months of 2013, the share of bad and doubtful loans has decreased by 0.9 p.p. down to 15.6%.
Public and business confidence in the banking system has been growing. During 2012, household deposits had grown by UAH 58 billion. Over the first five months of 2013, they have increased by UAH 32 billion. Deposits in the national currency were the main contributors to the deposit growth.
Corporate deposits have also been on an upward trend, having expanded by UAH 16 billion in 2012 and by UAH 7 billion over the first five months of 2013.
According to Mr. Borys Prykhodko, such positive dynamics contributed to the growing liquidity of Ukrainian financial institutions. Over the first five months of 2013, the average daily balance of banks’ correspondent accounts has gone up by 21% compared to the respective period of the previous year.
“We have announced the financial results in an attempt to prove to the international community that investments in the Ukrainian banking sector are not only profitable but also reliable. The Business Conference “ABC: Ukraine & Partners” serves as a platform for establishing fruitful and constructive dialogue with potential investors and offering solutions to the current challenges facing foreign businesses operating in our country," said First Deputy Governor of the National Bank of Ukraine Borys Prykhodko.
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