NBU Changes Approaches to Determining the Findings of Resilience Assessment of Banks

The National Bank of Ukraine (NBU) has changed its approaches to determining the findings of resilience assessment of banks and the banking system. In particular, the regulator will determine the required levels for the regulatory capital adequacy ratio and the common equity adequacy ratio based on the findings of the resilience assessment. At the same time, the NBU allowed banks to meet the required ratios by the end of 2019 by both increasing capital and restructuring assets and liabilities.

The above changes were approved by NBU Board Resolution No. 21 On Approval of Amendments to the Regulation On Assessing the Resilience of Banks and Banking System of Ukraine[*] dated 17 January 2019 and will enter into force on 26 January 2019.

Please be reminded that the NBU launched the annual resilience assessment of banks and the banking system of Ukraine in 2018. Based on the findings of the banks’ resilience assessment in 2018, the NBU determined the banks’ capital needs (shortfall). The banks covered the capital shortfall by implementing the capital increase plan and/or the restructuring plan.

At the end of 2018, the NBU published the findings of the resilience assessment broken down by banking institution. The findings show that the banking sector is sufficiently capitalized but that it should increase the safety margin in order to enhance resilience to possible crises.