The NBU Governor Valeria Gontareva held a monthly meeting with managers of the largest banks. The meeting took place at the National Bank of Ukraine on 6 October 2015. “Forty largest banks of the country account for 93% of the entire banking system, so we can definitely say that now in this room the entire banking sector is represented”, as the Governor stated at the beginning of her speech.
Valeria Gontareva noted that since the last meeting with bankers a range of significant events had taken place. “We continue to ease monetary policy, introduced foreign exchange purchase auctions in the interbank to increase the NBU FX reserves, withdrew bank Finance and Credit JSC from the market, received the IMF mission and expect the important draft laws to be adopted by the Verkhovna Rada within the framework of the financial sector reform”, noted Valeria Gontareva.
The NBU Governor informed bankers on the stabilization of macroeconomic situation in the country and regulator’s monetary policy softening. “We cut the discount rate from 30% to 22% twice in the past two months. Next year, the NBU will put its effort to decrease the discount rate to the level that is slightly higher than the present rate of inflation”, stressed the Governor of the NBU. According to the NBU's forecasts, inflation in 2016 will stand at 12%.
The stable foreign exchange market allowed the NBU to intervene in the interbank market by purchasing foreign exchange for international reserves. “Since 17 September, the NBU has been conducting the foreign exchange auctions through which we have already bought USD 223 million”, noted Valeria Gontareva. The NBU international reserves increased up to USD 12.8 billion in September. “Now we observe the increased foreign exchange supply that we can repurchase for the NBU reserves without triggering volatility in the foreign exchange market”, said Valeria Gontareva.
First Deputy Governor of the National Bank of Ukraine Oleksandr Pysaruk noted that the banking system clean-up among the largest banks came to an end. Now the group of small banks is under clean-up process. The NBU expects small banks to consolidate into large banks as by summer 2016 they are required to increase the capital to UAH 120 million, and the consolidation is the most realistic option for capital increase.
Deputy Governor of the NBU Vladyslav Rashkovan told bankers about the clean-up of the auditing services market - eight companies, among those which provided non-credible audit reports on the financial standing of the financial institutions, were suspended from work in the banking market. “We recommend to cooperate with professional audit companies and pay great attention to reports; you may rest assured that all reports are carefully studied at the NBU”, stressed Vladyslav Rashkovan.
Business Ombudsman Algirdas Semeta invited by the EBRD was present at the meeting with bankers. He informed bankers that the Business Ombudsman Council is fully independent and financed by the international donors. Its main task is to represent and protect the interests of business at the public authorities. A new institution is designed to ensure that business is conducted in a transparent manner in Ukraine. Business Ombudsman told bankers from leading financial institutions in what way he can assist them. To receive and investigate claims filed by commercial banks regarding actions of state owned banks, state owned companies, which are serviced by them, as well as of the NBU is exactly within the scope of his powers.
After reports by the NBU managers and Business Ombudsman, the bankers took the floor. Top managers of the leading banks said that household deposits had been on an upward trend in August-September. This trend persisted in October. Also according to the bankers, nearly 70% of new deposit agreements are entered into without the right to early withdrawal.