The NBU’s preliminary balance sheet data as of 1 January 2017, which are yet to be audited and verified by an external auditor, suggest that the NBU’s assets increased from UAH 849.2 billion in 2015 to UAH 940.6 billion in 2016.
“The growth in assets was mainly driven by an increase in Ukraine’s international reserves, which rose by UAH 2.2 billion, or by 17%, in 2016, reaching USD 15.5 billion as of the end of 2016. The expansion in assets reflects the NBU policies aimed at accumulating international reserves to underpin macro-financial stability,” said Director of the NBU Financial Controlling Department Oleh Strynzha.
Meanwhile, the central bank’s assets in domestic currency diminished by UAH 38.4 billion or by 8%, amounting UAH 439 billion as a result of the NBU’s prudent monetary policy geared toward achieving the inflation target. Mr Strynzha said that in 2016 the NBU’s securities holdings declined by UAH 10.1 billion, reflecting the absence of fiscal dominance over monetary policy. In addition, the bank’s debt owed to the central bank decreased substantially: in 2016, borrowers repaid a total of UAH 31.7 billion to the NBU under refinancing loans.
Meanwhile, the NBU's liabilities increased marginally by UAH 19.6 billion, reaching UAH 746 billion. In particular, holdings of certificates of deposit issued by the NBU declined by UAH 21.7 billion over the reporting period, amounting to UAH 68.2 billion as of the end of 2016.
“This amount of liquidity invested in the NBU CDs implies that banks excessive funding resources that could be directed toward lending to the economy as yields on CDs are lower than loan interest rates. Restarting lending to SMEs is one of the tasks facing the banking sector in 2017 and following years. The fully capitalized banking system, the expected further decline in inflation and NBU refinancing rates will effectively facilitate lending recovery. However, it is important to underline that Mps have to contributes to efforts to restart lending by passing Draft Law No.6027 on the Restoration of Trust Between Borrowers and Lenders, which would mitigate credit risks faced by banks when issuing new loans and lower interest rates on loans and make loans more accessible for borrowers,” stressed Mr Strynzha.
In 2016, the NBU’s equity capital expanded by UAH 71.7 billion to UAH 194.6 billion. The equity expansion was mainly driven by profits .
The NBU’s preliminary financial statements for 2016 are subject to audit by external auditors and approval by the NBU Board. Following the confirmation by the external audit and approval by the NBU Council of the annual financial report before 30 April of the year following the reporting year, the NBU will determine the profit before distribution that will be set aside as the central bank’s reserves and transferred to the State Budget of Ukraine. An annual auditor's report will also be published on the NBU’s website.