Photo from UNIAN
Ukrainian banks in January-September 2020 received UAH 37.6 billion(US$1.3 billion)in net profit, which was 22% down against UAH 48 billion(US$1.7 billion)reported year-over(y-o-y), the National Bank(NBU)says.
The country's banks in the third quarter of 2020(Q3)posted UAH 13.8 billion(485.9 million)in net profit, which was 1.8 times up from Q2 and 20% down y-o-y, according to NBU's statement published on the regulator's website on October 29.
Major reason behind decline in banks' revenue
"The main reason behind the lower financial result this year is the formation of reserves worth UAH 20.9 billion [US$735.9 million] for expected losses. For comparison, in 2019, banks over the same period formed reserves worth UAH 8.3 billion [US$292.3 million]. The overall decline in business activities during the quarantine and falling demand for loans and banking services, as well as the growth in loan defaults have affected the banks' interest and commission yield," the regulator said.
According to the NBU, the growth rate of the banks' net commission and interest income was the lowest in the last four years, but at the same time, the volume of such incomes is sufficient to cover the administrative expenses of most banks.
As of October 1, 2020, some 62 banks were profitable out of 74 solvent banks, as they received UAH 40.8 billion(US$1.4 billion)in net profit, which covered the losses of 12 banks totaling UAH 3.2 billion(US$112.7 million).
Read also Banks in Ukraine positive of prospects for lending next year "Nine month-profit was generated mainly by PrivatBank(UAH 21.3 billion/US$750 million, or 56.6% of total profits)and a group of banks with foreign capital, except for Russian one(UAH 9.2 billion/US$323.9 million)," the NBU said.
Ukrainian banks' net profit fell by 26.4% in January-August 2020 year-on-year, to UAH 32.6 billion(US$1.1 billion).