Bank liabilities increased by 2.1% — NBU
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During the 1st quarter, shelling of the energy infrastructure continued, but the banks ensured stable operation of the branches and resumed work in the deoccupied regions. This is stated in the Survey of the banking sector for the 1st quarter of 2023.
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The situation in the banking sector
The liquidity of the sector remains high. The volume of liabilities of solvent banks increased by 2.1% in the first quarter due to the active increase in business and household funds, while the share of refinancing by the NBU halved to 0.9%.
The short-term structure of the resource base of banks is improving. The growth of emergency funds of the population in hryvnia accelerated to 9.6% for the quarter.
The weighted average rates for raising funds for businesses rose to 13.2%, for the population – to 10.6% per annum.
Demand for loans remains suppressed. The corporate credit portfolio for the first quarter decreased by 4.8% in national currency and by 5.5% in foreign currency.
However, the decline in the volume of the net retail credit portfolio slowed down to 1.9%. Credit risk remains key for banks, but their recognition of credit losses as a result of the war has slowed.
In the first quarter, the share of non-performing loans increased by 0.7 percentage points to 38.8%. Net allocations to loan reserves for the quarter amounted to only UAH 1.8 billion (-90.2% y/y).
Read: About 30% for the population and 20% for business. The cost of loans has almost stabilized.
“Banks confidently survived the full-scale war and are quickly resuming work in the de-occupied territories,” said Ekaterina Rozhkova, First Deputy Chairman of the NBU. — The next stage is the post-war recovery, in which the banking sector will actively participate by lending to the population and business. Improving the structure of the resource base and recognizing credit losses are the most important elements of this preparation.”
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Source: Ministry of Finance
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