In April, Banks’s Losses Make UAH 7.3 Billion

In April this year, the loss of banks amounted to UAH 7.267 billion.

That follows from the NBU data, Ukrainian News Agency reports.

It is noted that the banking sector remains operationally profitable, despite the slower growth in operating income and increased operating costs as a result of hostilities.

Net operating profit for the first four months of 2022 increased by 10% year over year, despite a decrease in this indicator in March-April.

At the same time, banks have formed significant reserves against expected losses due to the consequences of the war.

Transfers to reserves increased seven times compared to January-April 2021 - up to UAH 32.7 billion, of which 83% or UAH 27 billion were formed in March-April.

The general slowdown in business activity since the start of the all-out war has led to a drop in demand for loans and banking services, and has led to a decline in settlement amounts, a key base for banks' fee and commission income.

The introduction of credit holidays by banks and the reduction of fees for using their services also had a negative impact on the income of financial institutions.

Net fee and commission income decreased in the first four months of 2022 by 22% year over year; growth of net interest income in April amounted to 18% year over year compared to 35% year over year in the first two months of 2022.

As a result, the net loss of the banking sector in the first four months of this year amounted to UAH 7.4 billion, although back in the first two months of 2022 banks operated with a net profit of UAH 9.9 billion.

Banks' income in the first four months of 2022 increased by 11% year over year to UAH 88.6 billion, expenses - by 53% to UAH 96.0 billion.

As Ukrainian News Agency earlier reported, in the first quarter of 2022, banks showed a negative financial result of UAH 160 million due to a net loss of UAH 10.07 billion in March.

In 2021, the profit of banks amounted to a record UAH 77.5 billion.

In 2020, the profit of banks decreased by 29% to UAH 41.3 billion.

In 2019, solvent banks received UAH 59.634 billion of net profit.

Net assets of banks decreased by 2.2% over the first quarter as a result of a decrease in investments in certificates of deposit of the National Bank and domestic government bonds.