Despite certain positive trends in the banking sector of Ukraine, more than two dozen banks turned out to be unprofitable in the second quarter of 2022, and some of those who retained profitability did this by reducing their own expenses, in particular wages. This is stated in the Review of the banking sector for the second quarter of this year, issued by the National Bank.

" UAH 5 billion in the II quarter, 4. UAH 6 billion – since the beginning of the year. The number of loss-making banks for the quarter amounted to 24 institutions,"

The total loss of the mentioned 24 banks amounted to 10. 5 billion. UAH.

In particular, three of the four state-owned banks - Ukreximbank, Oschadbank and Ukrgasbank - were unprofitable..

At the same time, state-owned PrivatBank generated almost half of the profits of profitable banks.

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Some of those institutions that maintained operating profitability were forced to cut costs, in particular on wages.

" Banks cut operating expenses, including payroll expenses during April-May..

Revenue growth and cost savings enabled the vast majority of institutions to maintain operating profitability. The total ratio of operating expenses and operating income in the II quarter amounted to 37.8% against 49.9% in the corresponding period last year.

The main risks for the banking system in the NBU were:.

hostilities, their distribution and duration. Obviously, the number of controlled territories in Ukraine affects the number of branches of Ukrainian banks that can operate..

the price of loans and the ability of customers to repay loan obligations to banks. At the same time, banking institutions are quite capable of restructuring certain debts, which will positively affect the stability of the entire system..

reduced demand for loans.

The period of the second quarter also recorded a significant decrease in the use of active payment cards after the start of the war.

The second half of May was marked by a slowdown in the rate of receipts of household funds on bank deposits.

According to these aspects, it will be possible to expect a certain level of stabilization of the banking system after achieving peace or a partial truce at the front..

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The main positive news was:.

resumption of work of banks in regions free from occupation,.

increase in hryvnia deposits among the population,.

growth of foreign currency deposits of business.

It should also be noted that during this period there was an increase in rates on deposits in the national currency, and net assets reached the pre-war level..

The National Bank of Ukraine also decided not to punish banks for non-compliance with liquidity and capital requirements for the duration of the war..

Since the beginning of the war, the banking system for the first time became profitable in the second quarter, based on the hryvnia equivalent. During this period, banks received 189.082 billion. hryvnia at an expense of 185.675 billion. hryvnia. We also managed to accumulate reserves that are 12 times higher than the same period last year..

In the second quarter, banks increased their activity in the liberated territories by resuming the network of branches.

To combat inflation, the NBU raised the discount rate to 25% per annum, which improved the attractiveness of deposits in state currency compared to foreign.

Such actions were able to reverse trends and improve the rate of receipt of money on deposits.. The most interesting for depositors were deposits for three months in hryvnia.

At the same time, hryvnia loans to business entities increased to an average of almost 18%, this figure is associated with an increase in credit risk.

According to the Deposit Guarantee Fund for individuals, including individual entrepreneurs, the total amount of deposits in the banks participating in the fund amounted to 935.5 billion as of August 1. UAH. Deposits in foreign currency amounted to UAH 355.1 billion, the remaining UAH 580.4 billion were in national currency. FLP-depositors had less than 10% of the total number of deposits in banks, or UAH 90.0 billion.