For the first time, the National Bank of Ukraine publishes data on non-performing (default) loans compiled in line with the Regulation on Credit Risk Assessment. This regulation brings the definition of “non-performing asset/loan” into full alignment with the internationally accepted definition "non-performing exposures / loans" (NPE/NPL). Under the new rules, a non-performing exposure/loan is one that is past due more than 90 days (30 days for debtor banks) or one in which the debtor is unlikely to fully meet obligations without the foreclosure of collateral.
For further details on the new definition of “non-performing asset/loan”, please see the presentation.
The share of non-performing loans accounted for 55.1% as at the end of Q1 2017, as calculated in accordance with a new methodology. A significant increase in NPL ratios as compared to December 2016 can be attributed to the new principles underlying the definition of non-performing loans. The other two contributing factors include:
- the exclusion of off-balance sheet assets from the calculation of non-performing loans and
- the recognition of non-performing loans by Privatbank after its nationalization.
Data on the amounts of non-performing loans/ assets and non-performing loan/asset ratios will be published on a monthly basis.