In order to strengthen confidence in Ukrainian banks and secure banking sector stability, the National Bank of Ukraine has launched a diagnostic assessment of banks. The 35 largest banks in terms of total assets are subject to this assessment.

The move has been envisaged by the Stand-By Arrangement (SBA) with the International Monetary Fund and the Financial Sector Support Project for Ukraine run by the World Bank.

The diagnostic assessment of banks will be conducted by independent audit firms in accordance with the requirements set by the National Bank of Ukraine. It will include the asset quality review and the regulatory capital adequacy (sufficiency) assessment that will be conducted to identify the amount required to achieve full capitalization of banks.

To date, Group 1 banks have entered into agreements with audit firms and from May 26, 2014, the diagnostic assessment of banks has been launched.

The diagnostic assessment of the next 20 largest banks in terms of total assets will be launched from July 2014.

Based on the results of the diagnostic assessment, the banks will devise capitalization programs or restructuring plans.

The success of the diagnostic assessment of banks and their proper capitalization upon its result will enhance the resilience of the banking system and help protect the interests of depositors and creditors of Ukrainian banks.