Ukrainian banks made a profit of nearly $2 billion in January-September 2021, their best results in the last decade, the National Bank of Ukraine reported on Oct. 29.
The NBU said that 71 Ukrainian banks collectively made a total net profit of nearly $2 billion over the last nine months, which is nearly $525 million more than in January-September last year. According to the report, 64 out of 71 banks in Ukraine remained profitable in 2021, while 7 banks reported losses.
There are many factors that boosted the performance of Ukrainian banks amid the COVID-19 pandemic, economists said. Among them are the economic growth in 2021, rapidly increasing consumer demand, and the rising popularity of online and card payments, according to Ukrainian economist Eugene Dubogryz.
Another reason, according to the NBU, is the reduced allocation of money to the state monetary reserves, which regulate the money supply in the country and back up the value of the national currency.
Over the last nine months, money transfers to the reserves decreased by over 60% — from $800 million in 2020 to $266 million this year, according to the NBU. As of September 2021, Ukraine’s monetary reserves held $28 billion of assets, 90% of them were in foreign currency.
According to the NBU’s survey in October, banks hope to increase the flow of capital from citizens and businesses in the next 12 months.
Experts said that the Ukrainian banking sector’s stability during the pandemic proved that the country’s clean-up of the banking sector in 2014–2016 was not in vain.
After closing down nearly two-thirds of Ukrainian banks, many of which were used for illicit schemes, the government introduced strict financial monitoring requirements. These helped to stabilise the sector during the pandemic.
Ukrainian banks also invested in developing their online services to serve more customers over the internet during quarantine. According to experts, this helped them to stay competitive.
