The banking system of Ukraine for the first time in five years ended the first half of the year with a net loss

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Курс money

Ukrainian banks received a net loss of UAH 4.6 billion for the six months of 2022, the National Bank reports on Thursday, August 11.

At the same time, almost the entire loss was formed in the second quarter – 4.5 billion rubles.

The negative financial result was determined by the significant volumes of reserves formed for expected losses due to the consequences of the war: banks formed reserves for UAH 57.9 billion, of which in March-June — for UAH 52.1 billion.

“The realization of credit risk as a result of a full-scale war led to the loss of the banking sector for the first time in the last five years. Reserves for credit losses will continue to grow,” said Yaroslav Matuzka, Deputy Head of the NBU.

The growth rate of net interest income of banks slowed down from 35% in January-February to 19% in March-June on an annualized basis.

Decrease in demand for banking services limits banks’ fee income. Net fee and commission income decreased by 35% yoy in March-June compared to a 15% yoy growth in January-February.

Net operating profit before provisions for the second quarter amounted to UAH 33.5 billion against UAH 23.5 billion in the second quarter of 2021.

As of July 1, out of 68 solvent banks, 47 banks were profitable and received a net profit of UAH 10 billion, 21 — a loss of UAH 14.6 billion.

Recall that last year, Ukrainian banks received a record profit — UAH 77.530 billion, which is 95.2% more than in 2020 (UAH 39.727 billion).