Ukraine's banking system faces first regulatory capital dip since 2022
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Ukrainian banks are facing growing difficulties in meeting financial obligations has, parliamentary Finance Committee Chairman Danylo Hetmantsev said on Telegram on Jan. 17.
"According to the National Bank of Ukraine (NBU), as of Jan. 1, 2024, the regulatory capital adequacy ratio of banks decreased to 21.1% from 25.4%, as of Dec. 1, 2023,” he said.
“It's the first time we're seeing a dip since November 2022.”
The capital adequacy ratio is a key indicator of how well financial institutions can meet their obligations.
The decline reflects the results of a 2023 NBU study to assess the asset quality and capital adequacy of Ukraine’s 20 largest banks.
"The study found that the assessment of credit risk and capital adequacy ratios for most institutions is correct,” Hetmantsev said.
“However, some banks…revised the amount of losses as a result of the diagnostics, which led to a decrease in capital.”
While the majority of banks met the capital requirements as of Jan.1, 2024, several institutions were in the “zone of increased attention.”
According to Hetmantsev, these banks “must submit plans for recapitalization and restructuring to the NBU.”
They will be given until March 2026 to “increase their operational efficiency and close the capital need on their own.”
In any case, said Hetmantsev, the situation is currently under full control.
"The banking system as a whole has a sufficient level of capital, which is almost twice the minimum level and is higher than at the beginning of the full-scale war," he said.
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