Banks Receive UAH 34 Billion Profit In Q1

Solvent banks in the first quarter of 2023 received UAH 34 billion of net profit against UAH 152 million of loss in the first quarter of 2022.

This is stated in the NBU message, Ukrainian News Agency reports.

The main factors of the profitability of the sector are the growth of income as a result of the gradual resumption of banking activity and relatively insignificant volumes of reserve development.

Banks increased operating income by 48% year-on-year.

Net interest income for Q1 year-on-year increased by 41%.

Despite the significant increase in interest expenses due to the increase in interest rates on deposits, interest income increased even more significantly.

Net commission income rose 20% compared to the first quarter of 2022.

Banking services are recovering with a gradual recovery in economic activity, including after shelling of energy infrastructure at the end of last year - the beginning of this year.

The increase in the profitability of banks is also facilitated by the positive result of transactions in the purchase and sale of currency, which in the first quarter was 2.3 times higher in annual terms.

Net operating profit before deductions to reserves doubled in the first quarter of 2023 in annual terms to UAH 45.9 billion.

The rate of deductions to reserves for losses from active operations decreased compared to the indicators of the 1 quarter of the previous year by 82%, in particular, to reserves for loans - by 90%.

In general, since the beginning of the full-scale invasion, banks have formed reserves for credit losses of UAH 108 billion.

The return on equity in the sector as of April 1, 2023 was 58%, up from -0.25% a year ago.

The income tax accrued for the quarter exceeded the corresponding annual figure of the historically most profitable 2021.

As of April 1, 2023, only five banks out of 65 solvent institutions were unprofitable with a combined loss of UAH 40 million.

As Ukrainian News Agency earlier reported, in 2022 banks reduced net profit by 68% to UAH 24.7 billion.

In 2021, bank profits were a record UAH 77.5 billion.

In 2020, bank profits decreased by 29% to UAH 41.3 billion.

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