In 2021, Ukrainian solvent banks achieved a historical record 77.5 billion UAH of net profit, according to the National Bank of Ukraine (NBU). Among them, Privat, Raiffeisen and First Ukrainian International Bank (FUIB) earned the most. This is almost twice as much as in 2020, and 33% more than in pre-crisis 2019.
As of January 1, 2022, out of 71 solvent banks, 66 were profitable and had a net profit of UAH 77.9 billion, which covered the losses of five banks totaling UAH 0.4 billion. The sector's profits are concentrated: the five most profitable banks accounted for 67% of total profits.
The most profitable banks in 2021 were:
- PrivatBank - UAH 35.05 billion;
- Raiffeisen Bank Aval - UAH 4.858 billion;
- FUIB - UAH 4.188 billion.
The most unprofitable ones were:
- Pravex Bank - UAH 266.25 million;
- UNEX Bank - UAH 50.355 million;
- BTA Bank - UAH 32.085 million.
The return on capital of the sector increased to 35.2% compared to 19.2% in 2020. In the fourth quarter of 2021, banks' net profit was the largest, when in addition to the record growth rate of interest income, banks disbanded reserves - UAH 26.1 billion, which is 12.6 times more than in the fourth quarter of 2020.
The main factors of profitability were the increase in operating efficiency and a significant reduction in allocations to reserves, said the NBU.
Record profitability and available capital reserves testify to the readiness of banks to introduce new regulatory requirements to increase resilience to future challenges and maintain financial stability.
Kyrylo Shevchenko, Chairman of NBU
The annual increase in net interest and commission income was 39% and 25%, respectively. The NBU said that this was due to an increase in interest income from lending, which has revived significantly since the crisis.
Allocations to loan reserves for the year decreased by 58%. In addition, previously reserved funds related to legal risks were disbanded.
Ukrainian bank sector vis-a-vis military crisis with Russia
The Ukrainian financial market is responding to the risk of Russian invasion. However, representatives of seven major Ukrainian banks said in a conversation with Forbes that they do not see an outflow of deposits.
This statement is supported by the daily statistics of the NBU on the demand of banks for cash UAH. Since January 13, there has been only one day when banks exchanged non-cash UAH for cash in large quantities.
