Most of the banks and NBFIs polled by the NBU reported an improvement in the financial sector’s performance over the last six months (57% of respondents, up from just 3% in November 2022). The share of respondents expecting a worsening of financial sector conditions in the next six months shrank to 3% from 51% in November.
This is according to the May 2023 Systemic Risk Survey.
For the second survey running, respondents have improved their assessments of the financial sector’s resilience to high-impact adverse events. The proportion of respondents rose again who said the financial sector’s resilience was high or very high. The aggregate balance of responses came in at an all-time high since the survey was launched in May 2018.
At the same time, there has been a noticeable improvement in assessments of the overall level of risk in the financial sector: the percentage of respondents who regarded this risk as high or very high decreased to 58% from 83%.
Respondents continue to upgrade their assessments of the financial sector’s current standing: for the first time since the full-scale war broke out, the balance of responses (+11%) moved into positive territory.
Based on the survey’s findings, russia's war against Ukraine remained the primary risk to the financial sector, but the risk landscape underwent significant changes. The factor of corruption and the activities of law enforcement agencies and the judicial system again ranked second among leading risks. Since the onset of the full-scale war and up until recently, this risk has barely made it to the top ten threats. Fraud and cybersecurity risks, as well as risks of the level of economic activity, the value of assets, and the quality of collateral, also made the top five. Exchange-rate and inflation factors slid from the top to the bottom of the twenty biggest risks.
Conducted by the NBU twice a year, the Systemic Risk Survey looks into how the largest banks and nonbank financial institutions perceive existing and potential risks to the financial sector. The poll reflects how financial institutions’ top managers assess the financial sector’s performance over the past six months and what they expect in the next six months.
The survey was conducted between 11 and 24 May 2023, with the participation of managers of 22 banks, 10 insurers, and 3 investment companies. Financial institutions under special economic measures and other restrictions (sanctions) have not been surveyed. Final results were calculated by assigning equal weights to each survey response, regardless of the size or market share of the bank/company.
The results presented in the survey are based on respondents’ opinions and do not necessarily reflect the NBU’s assessment of financial system risks.