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Ukrainian banks post record-high profit of 59.6bn hryvnyas in 2019

Privatbank accounts for over half of it.

Ukrainian banks post record-high profit of 59.6bn hryvnyas in 2019
Photo: Max Trebukhov

The profit of Ukrainian banks reached a record 59.6 billion hryvnyas in 2019. The revenues of the banking system amounted to 244.4bn hryvnyas, expenses to 184.8bn hryvnyas.

"These are not super-profits of state-owned banks from government bonds. This is the real profit of the banking sector. If you look at the interest income of state-owned banks, investments in bonds are only 12%. Bankers will be interested in another indicator, ROE, that is, return on capital. Today, our banks' ROE is 34.2%," the first deputy governor of the National Bank of Ukraine (NBU), Kateryna Rozhkova, said on Facebook. 

Rozhkova noted that this is higher than the pan-European rate, 7%, and that in the neighbouring countries: Hungary - 18%, Romania - 17%, Czech Republic - 16%.

According to Rozhkova, the main factors behind such "superprofits" are banks' high operational efficiency and low allocations to reserves, which shrank from 24bn to 12bn hryvnyas over the year. She also noted that with the deceleration of inflation, the rates and interest margins, and, accordingly, banks' profits will decrease.

More than half of the profit of the banking system is the financial result posted by Privatbank. Last year, it earned 32.6bn hryvnyas. As of 1 January 2020, the bank's net assets amounted to 314,105,943,000 hryvnyas, the loan portfolio to 61,033,321,000 hryvnyas, customer accounts (individuals and legal entities) to 231,386,432,000 hryvnyas, individuals' assets to 181, 013,289,000 hryvnyas.

In 2018, Privatbank posted the profit of 11.67bn hryvnyas.

In 2018, the banking sector for the first time in five years made a profit which amounted to historical 15bn hryvnyas.

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