The banking system can become more profitable next year, experts with the Independent Association of Banks of Ukraine (IABU) believe. It can be achieved mainly due to resource-free components of income, asset quality management, as well as optimization of interest and non-interest expenses. Despite the economic and political instability in the country, interest rates on borrowed resources in the next six months will remain at a relatively low level due to improved access of banks to NBU refinancing loans, the IABU said in a statement. In Jan-Nov, Ukrainian banking system generated a net profit of UAH 2.401bn down by 1.8-fold y/y, the National Bank of Ukraine (NBU) has announced. In November their financial result was positive at UAH 303mn. Banks' incomes were UAH 151.073bn in Jan-Nov, up by 10% y/y. Banking sector expenses increased by 11.8% y/y to UAH 148.7bn. This includes UAH 117.58bn of the banks' interest income for 11 months, UAH 22.63bn of fee incomes, and UAH 3.94bn of other operating income. The banks' interest expense for the mentioned period was UAH 73.26bn, commission expense - UAH 3.57bn, other operating expense - UAH 10.58bn, general administrative expense - UAH 36.23bn, and provision for reserves - UAH 23.50bn. Total assets of banking institutions grew by 10% over the Jan-Nov and by 4% y/y, announced NBU's official Natalia Ivanenko . Credit operations make up the main part of active operations (64%), their volume increased by 9% ytd and 0.4% y/y, she stressed. The main part of credits belongs to credits, extended to the economy. The volume of credits, issued to legal persons, grew by 11% over 11 months of this year compared to 6% growth seen during the same period last year. At the same time, the main amount of credits to the economy was extended in the national currency. Private funds in banks grew by 19% over Jan-Nov. The total growth (97%) was at the expense of deposits in the national currency and the majority of them were long-term deposits. Funds of households make up the main component of our banks' resource base, this is 40%, she said. As of 1 November 2013 , 181 Ukrainian banks (public joint-stock companies) held the license granted by the National Bank of Ukraine for performing banking activity, 1 bank whereof was licensed as a remedial bank.
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