On 4 October 2017, NBU Acting Governor Yakiv Smolii and Deputy Governor Kateryna Rozhkova participated in the working session of the parliamentary Committee on Financial Policy and Banking.
At the beginning of the meeting Yakiv Smolii informed all those present about positive trends in the banking system, namely, growth of deposit portfolios of banks. At the same time, it’s not the case for loan portfolios.
“Certainly, fast recovery of lending to real sector is a very important task for the banking system. And we already can see that banks accumulated sufficient resources. However, we have to solve several issues by amending the legislation”, said Yakiv Smolii.
In particular, according to NBU Acting Governor, the restoration of lending will contribute to reduction of non-performing loans in the portfolios of banks and improve creditors' rights protection. In this regard, addressing to the MPs Yakiv Smolii stressed the need to adopt a number of draft laws - On Amendments to Certain Laws of Ukraine on Establishing and Maintaining of the National Bank of Ukraine Credit Register (No. 7114), the introduction of which will increase the transparency of lending and will contribute to reduction of banks’ risks when performing asset transactions, On Amendments to Certain Laws of Ukraine on Restoration of Lending (No. 6027-d), On Amendments to Certain Laws of Ukraine Concerning Improvement of Bankruptcy Procedures (No. 3132-d), as well as draft amendments to the Tax Code optimizing the procedures for loans restructuring.
NBU Deputy Governor Kateryna Rozhkova briefed the audience on key aspects of prudential supervision and top-priority projects aimed at increasing of banking supervision efficiency. In particular, Kateryna Rozhkova informed about findings of the diagnostic study of 37 small banks, about bringing the authorized capital up to UAH 200 million, and discussed with the MPs the prospects of raising the banks’ authorized capital to UAH 300 million.
According to NBU Deputy Governor, as of the beginning of 2017, 37 out of 96 operating banks had authorized capital less than 200 million, including contributions. In 2017, from these 37 banks: five were removed from the market, one bank agreed to cease its banking activity without dissolving the legal entity; 25 banks conducted additional capitalization in line with the minimum capital adequacy level; six banks failed to meet the requirements on full capitalization, and the work with them is in progress. As for further plans in this area, according to Kateryna Rozhkova, in view of diagnostic study findings, the NBU with the IMF are considering to review the schedule for the minimum authorized capital amount increase.
Based of the small banks diagnostic study findings only four of them require additional capitalization on the total amount of UAH 143.1 million. Moreover, one of those four banks has already taken decision to cease banking activity (required amount of additional capitalization - UAH 12 million).
Kateryna Rozhkova also told MPs about the introduction, starting from 2018, of an annual diagnostic study for the largest banks that account for 95% of the system assets. Such diagnostic study will give systemic and comprehensive assessment of the banking system and major banks’ resilience to possible negative economic shocks. According to NBU Deputy Governor, the findings of such a diagnostic study will be public, which will enhance the transparency of the banking system.