The interim concise consolidated financial statements of the National Bank of Ukraine for the first six months of 2022 were signed on 19 September 2022.
At the end of H1 2022, assets of the NBU increased by 3% compared to the consolidated data as of 31 December 2021 and amounted to almost UAH 1,417 billion.
At the same time, the resistance to russia’s full-scale military aggression against Ukraine significantly affected the balance sheet structure of the NBU. In particular, after the NBU purchased war bonds, the share of domestic securities in the NBU’s portfolio increased from 23.5% (in early 2022) to 39%. On the other hand, due to a decrease in foreign exchange reserves, the share of assets the reserves are comprised of declined from almost 63% (at the beginning of the year) to 48% (including due to the shrinking share of foreign securities).
As of the end of H1 2022, the loan portfolio of the NBU decreased by 9.7% despite a temporary increase at the beginning of the full-scale war, which was driven by the NBU’s emergency measures to provide banks with the fullest access to refinancing instruments. These measures helped maintain proper liquidity levels of banks, keep the situation under control, and ensure uninterrupted functioning of the banking sector. A half of the total loan portfolio was made up of long-term loans, with the outstanding debt on such loans decreasing by more than a quarter.
In the first six months of 2022, the NBU’s liabilities showed a strong growth in bank account balances (by 40%), including due to a decline in certificates of deposit (by 11%). In contrast, liabilities to the International Monetary Fund decreased by 8.3%, primarily as a result of the scheduled repayment of debt to the IMF in H1 2022.
The consolidated profit of the NBU amounted to UAH 69.7 billion in the first half this year. The main portion of the NBU’s profit was attributed to interest income, which exceeded UAH 41 billion and was 1.7 times the level of the same period last year. This was associated with both growth in interest-bearing assets and a rise in interest rates. The bottom line was also strongly influenced by gains from financial instruments revaluation of over UAH 42 billion.
At the same time, it should be noted that the consolidated profit set out in the financial statements of the NBU is not the portion of distributable profit that will be transferred to the state budget. The NBU’s liabilities in terms of the portion of distributable profit to be transferred the state budget will be calculated based on full-year results of 2022 and released in spring 2023.
The NBU’s forecast for the portion of distributable profit of 2022 to be transferred to the state budget in 2023 is UAH 19.4 billion. This information has already been provided to the government, the President, and the parliament.
The final amount of the portion of distributable profit that the NBU will transfer to the state budget in 2023 will depend on actual macroeconomic performance in 2022, and will be determined after confirmation by an external auditor and approval by the NBU Council of the NBU’s annual financial statements for 2022.
As a reminder, unlike in previous years, due to russia’s full-scale military aggression against Ukraine, the NBU, on 24 February 2022, transferred to the state budget a portion of its distributable profit in the amount of UAH 18.8 billion before the Consolidated Financial Statements for 2021 were confirmed by an external auditor and approved by the NBU Council. This amount was later confirmed by the external audit and approved as part of the financial statements for 2021.
The consolidated financial statements of the NBU (hereinafter referred to as “the ICCFS,” which stands for interim concise consolidated financial statements) provide information for explaining the events and transactions that are essential to understanding the changes in the NBU’s financial standing and performance that have occurred since the approval of the central bank’s latest annual consolidated financial statements.
The ICCFS for the period ended 30 June 2022 is considered together with the NBU’s annual consolidated financial statements compiled as of 31 December 2021 in line with international financial reporting standards, which were confirmed by the external auditor (Ernst & Young Audit Services LLC) and approved by the NBU Board.
The interim consolidated financial statements of the NBU for the period ended 30 June 2022 was prepared based on the same accounting policy, estimates, judgements, and assumptions as the latest annual consolidated financial statements.
In line with the Law of Ukraine On Protecting the Interests of Entities Submitting Reports and Other Documents during Martial Law or State of War, reports, including financial, accounting, and audit reports, must be submitted within three months after the martial law or state of war is suspended or lifted.