Profits of banks in Ukraine almost quadrupled last year, NBU reports
Kyiv • UNN
According to the National Bank of Ukraine, banks in Ukraine almost quadrupled their profits in 2023 compared to 2022.
The banking sector received UAH 86.5 billion in profit in 2023, according to operational data. This is reported by the National Bank of Ukraine , UNN reports.
Solvent banks in 2023, according to preliminary data, before confirmation by the annual audit, received UAH 86.5 billion in net profit. This is almost four times higher than in 2022 and 12% higher than in 2021, before the full-scale invasion.
Details
Banks' operating profits increased significantly. Operating income for the year increased by 15% compared to the previous year, and net operating income before provisions - by 19%. It is noted that the growth of these revenues remains driven by an increase in interest income from both highly liquid assets and lending.
The main factor behind the significant difference in profitability, compared to the previous year, was significantly lower allocations to provisions for losses from active operations, which decreased by 86% over the year. In total, since the beginning of the full-scale invasion, banks have formed reserves of UAH 133 billion, of which only UAH 17 billion in 2023.
In accordance with the changes to the legislation in December 2023, banks additionally charged the annual amount of income tax based on the results of 2023 at a higher rate of 50%. As a result, the banking sector's return on equity was 31.6% as of January 1, 2024. A year ago, this figure was 9.7%.
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As a reminder, the NBU's 2023 bank resilience assessment confirmed that most banks in Ukraine have sufficient capital, and the banking system as a whole has a high margin of safety.
As of January 1, 2024, according to annual indicators, only seven out of 63 solvent banks were unprofitable with a total loss of UAH 245 million.
Recall
Earlier UNN wrotethat the volume of cash turnover of banks in Ukraine increased in 2023: cash receipts and cash payments in banks increased by 13.6% and 11.5%, respectively, due to the economic recovery.
