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11.12.2008
Credit-Rating: Ukraine’s banking system to decelerate
Credit-Rating notes that the Ukraine's banking system decelerates their growth rates due to turbulence in global financial markets and national economy. Thereat, many banks, mainly those systemic, have faced rising credit and liquidity risks, which were prompted by eroded trust to banking institutions and by devaluation of the national currency.
Considering the present situation in the market, many banks have curbed their lending activities, and the growth of NPLs became in great excess of that of term indebtedness. The banks key figures remained adequate, though under expected deficit in recourses and deteriorated asset quality, their maintaining is possible due to cutbacks in expenditures, which are not connected with the principal activity.
The regulators support was aimed primarily at maintaining of liquidity in the market, and the biggest concerns the banks may encounter will be associated with aggravated economic environment, which may prompt significant erosions in solvency of legal entities and individuals.
The anticipated decrease in banks lending activities may also negatively affect personnel policies of companies operating in the financial sector and in real economy sector. Thereat, the banks asset quality may erode due to rise in the volumes of NPLs in individuals portfolio. Credit-Rating notes that a number of banking institutions may face liquidity crunches, which will contribute to consolidations in the system. Credit-Rating also expects increase in regulatory influence upon the banking sector.
In-depth analysis of performance of Ukraine's banking sector in 3Q2008
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
