The National Bank of Ukraine (NBU) has held an express stress test in order to assess the impact of the current crisis on banks. It assessed the impact on capital of 26 large banks with the share of assets of the entire banking system of 91%.
The stress test results proved to be in general better than the ones from the last year. They showed that majority of banks were prepared for the crisis. However, the stress test revealed that nine banks, including two state-owned ones, may breach core capital adequacy requirement.
"They account for 30% of the sector's assets. Among them are two state-owned banks with a 25% share in terms of assets. The total need in capital during one year could be UAH 10.3 billion," the NBU said in its Financial Stability Report published on Wednesday.
At the same time, the NBU said that this is significantly less than the estimates of the stress test in 2019, which provided for the continuation of the economic growth cycle and showed a need for capital of UAH 14.1 billion, and under the unfavorable scenario involving a collapse of the economy and deep devaluation – UAH 37.4 billion.
The National Bank said that financial institutions with a significant concentration of corporate loans were traditionally in the most risky category. Another risk group is banks that operate exclusively in the lending segment with individuals.