The National Bank of Ukraine (NBU) has reviewed the list of systemically important banks annually.
The number of banks remains unchanged and encompasses 14 institutions, meanwhile, instead of Ukrsotsbank merged into Alfa-Bank last year, A-Bank was included in the list. According to the NBU, 14 systemically important banks are the following:
- OTP Bank
- Raiffeisen Bank Aval
- Universal Bank
Please be reminded that systemically important banks must meet tougher requirements designed to ensure the additional safety margin.
First, in addition to the statutory value of capital adequacy, such banks should raise a systematic importance buffer, which will take effect on 1 January2021 and will depend on the value of the bank systematic importance indicator:
- The systemic importance buffer is set to be 1% for Raiffeisen Bank Aval, Alfa Bank, A-Bank, FUIB, UkrSibbank, TAScombank, Universal Bank, OTP Bank, Pivdenny Bank and KredoBank.
- The systemic importance buffer should be 1,5% for Ukreximbank, Oschadbank and Ukrgasbank.
- The systemic importance buffer should be 2% for PrivatBank.
Second, these banks will need to devise the recovery plans as requested by the NBU. These plans are needed for rapid stabilization of systemically important institutions amid crises.
Third, systemically important banks must comply with the single counterparty maximum exposure ratio (N7). not exceeding 20% (25%– for nonsystemically important banks).
Noteworthy, after losing its status of systematic importance, a bank must adhere to tougher requirements for another 12 months.
The list of banks was approved by NBU Board Decision No. 155 On Identifying Systemically Important Banks dated 3 March 2020 that will come into effect on 5 March 2020.
The NBU annually indetifies the list of systemically important banks. The approaches to defining systemically important banks were revised in summer last year. The updated methology provides an accurate reflection on the significance of systemically important banks for financial market.