In the second quarter, Ukraine's banking sector suffered losses of 400 million hryvnia (954 million rubles.), Although in the half of the year still retained profitability. The National Bank of Ukraine (NBU) noted that the reason for the losses is the accrual of reserves by one of the "big banks". The analysis of the reporting shows that the statistics was spoiled by the "daughter" of Sberbank, which finished the second quarter with a loss of 7.17 billion hryvnia (17.1 billion rubles.). The Ukrainian subsidiaries of Vnesheconombank and VTB were also loss-making. The NBU expects that in 2018 the Ukrainian banking sector will become profitable for the first time in four years, however, experts of optimism do not share.
On Wednesday, the NBU published a survey of the banking sector for the second quarter. According to him, Ukrainian banks (82 credit organizations) in the first half-year received a total net profit of 8.3 billion hryvnia (19.8 billion rubles, at the rate of the Central Bank as of June 30, 2018) following the results of the first half of the year. However, this result was achieved in the first quarter of this year, in the second quarter the Ukrainian banking sector was unprofitable - UAH 400 million (RUR 954 million). The loss was due to the formation of reserves "one of the major banks, without taking this bank into account, the financial result would have been 6.8 billion hryvnia (16.22 billion rubles.), The NBU comments.
Although the Ukrainian regulator does not disclose the names of the credit institution, the reporting analysis quite easily reveals the culprit of losses. According to the accounts of Sberbank of Ukraine, in the second quarter it received a loss of 7.2 billion hryvnia (17.17 billion rubles.), After the profit of 74 million hryvnia (176.49 million rubles.) In the first quarter. Such a loss was the result of deductions to reserves, they amounted to UAH 7.3 billion for the second quarter (RUR 17.41 billion). The bank did not comment on such large-scale spending on reserves, it was not possible to get additional comments from the National Bank of Ukraine "Kommersant" yesterday.
However, market participants are confident that the giant reserves were created on the recommendation of the NBU. In May, the deputy head of the NBU Ekaterina Rozhkova pointed out that "the curtailment of activities is the only civilized way" for the emergence of "daughters" of Russian state banks from the Ukrainian market. And she did not hide the fact that the regulator is trying to speed up this process: "We have imposed restrictions on the expansion of the deposit base, interest rate and other restrictions." According to the reports of Ukrainian "subsidiaries" of Russian state-owned banks, their assets have recently shown a noticeable reduction (see the chart), and their obligations have decreased in comparable volume. In addition, as previously reported in the NBU, the leadership of the Savings Bank of Ukraine was given separate recommendations for its further development, which, the regulator did not disclose. Do not comment on these recommendations and in the Savings Bank.
As a result of the sharp deterioration in Sberbank's financial results, it became the leader in losses, having outstripped other "subsidiaries" of Russian state banks in this anti-rating. Ukrainian VTB received a loss of UAH 1.6 billion and UAH 800 million in the second quarter (RUR 3.81 billion and RUB 1.9 billion respectively), Vnesheconombank (VEB) subsidiary - Prominvestbank - 405, 5 million hryvnia for the first half and 111.2 million hryvnia for the second quarter (967.12 million rubles and 265.21 million rubles, respectively).
According to experts, Sberbank and VEB are still looking for a buyer for their Ukrainian assets, the negative financial results of their "subsidiaries" and the pressure of the NBU leave them less chance to sell.
"As for Prominvestbank and Sberbank, there were potential investors denied by the NBU," Ekaterina Rozhkova noted in May. "The issue is still open ... We do not see potential buyers today who could buy these banks, since they are very large" . According to Oleg Ustenko, Executive Director of the International Blazer Foundation (Region of Ukraine), despite the desire to sell subsidiaries, demand for them is low, as in the whole economy of Ukraine as a whole. "Attraction of foreign investment in the country is now at a historical minimum," he notes. "I'm not sure that Russian banks are ready to leave the market, giving away" daughters "for free, they will be able to realize them only after the situation stabilizes." Now the market is in limbo, and much depends on whether Ukraine will return to the foreign borrowing market in September and will receive another tranche from the IMF, the expert adds.
However, despite the uncertainty with the "daughters" of Russian banks and the losses they generate, which affect the entire market, the Ukrainian regulator expects that the banking sector of Ukraine will remain profitable by the end of the year. As noted in the review of the NBU, "significant allocations to reserves in the second half is not expected, the sector will be profitable by the end of the year." If the forecast comes true, the banking system of Ukraine will be able to profit for the first time after four years of losses against the background of the financial and economic crisis of 2014-2015 and the unstable political situation. However, the NBU experts do not share the opinion. According to Oleg Ustenko, these expectations are too optimistic. "I believe that by the end of the year the banking sector will be unprofitable, but it is premature to speak about the amount of real losses," he concludes.
On Wednesday, the NBU published a survey of the banking sector for the second quarter. According to him, Ukrainian banks (82 credit organizations) in the first half-year received a total net profit of 8.3 billion hryvnia (19.8 billion rubles, at the rate of the Central Bank as of June 30, 2018) following the results of the first half of the year. However, this result was achieved in the first quarter of this year, in the second quarter the Ukrainian banking sector was unprofitable - UAH 400 million (RUR 954 million). The loss was due to the formation of reserves "one of the major banks, without taking this bank into account, the financial result would have been 6.8 billion hryvnia (16.22 billion rubles.), The NBU comments.
Although the Ukrainian regulator does not disclose the names of the credit institution, the reporting analysis quite easily reveals the culprit of losses. According to the accounts of Sberbank of Ukraine, in the second quarter it received a loss of 7.2 billion hryvnia (17.17 billion rubles.), After the profit of 74 million hryvnia (176.49 million rubles.) In the first quarter. Such a loss was the result of deductions to reserves, they amounted to UAH 7.3 billion for the second quarter (RUR 17.41 billion). The bank did not comment on such large-scale spending on reserves, it was not possible to get additional comments from the National Bank of Ukraine "Kommersant" yesterday.
However, market participants are confident that the giant reserves were created on the recommendation of the NBU. In May, the deputy head of the NBU Ekaterina Rozhkova pointed out that "the curtailment of activities is the only civilized way" for the emergence of "daughters" of Russian state banks from the Ukrainian market. And she did not hide the fact that the regulator is trying to speed up this process: "We have imposed restrictions on the expansion of the deposit base, interest rate and other restrictions." According to the reports of Ukrainian "subsidiaries" of Russian state-owned banks, their assets have recently shown a noticeable reduction (see the chart), and their obligations have decreased in comparable volume. In addition, as previously reported in the NBU, the leadership of the Savings Bank of Ukraine was given separate recommendations for its further development, which, the regulator did not disclose. Do not comment on these recommendations and in the Savings Bank.
As a result of the sharp deterioration in Sberbank's financial results, it became the leader in losses, having outstripped other "subsidiaries" of Russian state banks in this anti-rating. Ukrainian VTB received a loss of UAH 1.6 billion and UAH 800 million in the second quarter (RUR 3.81 billion and RUB 1.9 billion respectively), Vnesheconombank (VEB) subsidiary - Prominvestbank - 405, 5 million hryvnia for the first half and 111.2 million hryvnia for the second quarter (967.12 million rubles and 265.21 million rubles, respectively).
According to experts, Sberbank and VEB are still looking for a buyer for their Ukrainian assets, the negative financial results of their "subsidiaries" and the pressure of the NBU leave them less chance to sell.
"As for Prominvestbank and Sberbank, there were potential investors denied by the NBU," Ekaterina Rozhkova noted in May. "The issue is still open ... We do not see potential buyers today who could buy these banks, since they are very large" . According to Oleg Ustenko, Executive Director of the International Blazer Foundation (Region of Ukraine), despite the desire to sell subsidiaries, demand for them is low, as in the whole economy of Ukraine as a whole. "Attraction of foreign investment in the country is now at a historical minimum," he notes. "I'm not sure that Russian banks are ready to leave the market, giving away" daughters "for free, they will be able to realize them only after the situation stabilizes." Now the market is in limbo, and much depends on whether Ukraine will return to the foreign borrowing market in September and will receive another tranche from the IMF, the expert adds.
However, despite the uncertainty with the "daughters" of Russian banks and the losses they generate, which affect the entire market, the Ukrainian regulator expects that the banking sector of Ukraine will remain profitable by the end of the year. As noted in the review of the NBU, "significant allocations to reserves in the second half is not expected, the sector will be profitable by the end of the year." If the forecast comes true, the banking system of Ukraine will be able to profit for the first time after four years of losses against the background of the financial and economic crisis of 2014-2015 and the unstable political situation. However, the NBU experts do not share the opinion. According to Oleg Ustenko, these expectations are too optimistic. "I believe that by the end of the year the banking sector will be unprofitable, but it is premature to speak about the amount of real losses," he concludes.
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