Condition And Prospects Of Financial Sector Improving - NBU Survey

The majority of heads of banks and non-banking financial companies surveyed by the National Bank reported an improvement in the financial sector over the past six months (57% instead of 3% in November 2022), and the share of respondents expecting a deterioration in the next six months decreased from 51% to 3 %.

This is evidenced by the results of the May 2023 Survey on Systemic Risks of the Financial Sector, Ukrainian News Agency reports.

For the second survey in a row, respondents improve their own assessments of the financial sector's resilience to significant negative events.

The share of respondents who rated the stability of the financial sector as high or very high increased again.

The overall balance of responses reached a record high since the survey began in May 2018.

At the same time, the assessment of the overall level of risk in the financial sector has noticeably improved - the share of respondents who considered it high or very high decreased from 83% to 58%.

Survey participants continue to improve their own assessments of the current state of the financial sector - the balance of responses (+11%) turned positive for the first time since the start of the full-scale invasion.

According to the results of the survey, the risk of war with the aggressor country, Russia, remained key for the financial sector, but the list of main risks has undergone significant changes.

The factor of corruption, the activities of law enforcement agencies and the judicial system returned to second place.

Since the beginning of the full-scale war, this risk has barely made it into the top ten.

Risks of fraud and cyber threats, risks of the level of economic activity and the value of assets and the quality of collateral made it to the top five.

The factors of the level of inflation and the exchange rate shifted from the leaders to the end of the twenty biggest risks.

As Ukrainian News Agency earlier reported, the survey on systemic risks of the financial sector examines the perception of the largest banks and non-bank financial institutions of current and potential risks for the financial sector and is conducted by the National Bank of Ukraine twice a year.

Its results reflect the assessment by top managers of financial institutions of the state of the financial sector over the past 6 months and expectations for the next six months.

The survey was conducted from May 11 to 24, 2023, with the participation of managers of 22 banks, ten insurers and three investment companies.

The sample did not include financial institutions to which special economic and other restrictive measures (sanctions) were applied.

The final results were not weighted by the size of the bank/company or their market share - all answers are equal.

The presented results are based on the answers received from the respondents and may not coincide with the assessment of the risks of the financial system by the National Bank of Ukraine.