The proportion of problem loans granted by Ukrainian banks decreased from 8.84% of the total in October to 8.33% in November, the National Bank of Ukraine (NBU) has announced. The proportion of problem loans was 8.33% of the total amount of loans granted by banks as of December 1 (8.84% as of November 1 ) or UAH 74.155bn (UAH 76.815bn as of November 1 ), and the total amount of loans granted was UAH 889.938bn as of December 1 (UAH 868.507bn as of November 1 ). Since the beginning of the year, the size of problem bank loans has reduced by 0.56pps from 8.89% to 8.33%. The regulatory capital of banks totaled UAH 192.916bn and their net profit totaled UAH 2.401bn as of December 1 . The S&P estimates the share of problem loans in Ukrainian banks at 20%, the agency has reported. Assets quality is the main negative factor in the Ukrainian banking system. Significant reduction in problem credits is not registered accounting for almost 20% of total credit portfolio. Moody's forecasts troubled loans to stay around 35% of all loans by end-2013, putting negative pressure on the aggregate measures of the banking system's capital adequacy, which will probably reduce to 14% from 18% at end-2012, Moody's underlines. The IMF believes that Ukraine should perform independent audit of banks for objective appraisal of quality of their assets, IMF Resident Representative in Ukraine Jerome Vacher has announced. According to IMF experts' estimates, the asset quality is one of the weakest points of the Ukrainian banking system. In the course of the independent audit, not only quality of assets must be evaluated, but also adequacy of its provisioning, adequacy of pledges in hand, adequacy of loan grading, he added In addition, Vacher recommended: removal of regulatory and tax hurdles for restructuring and selling non-performing loans; implementing supervision on consolidated basis; development instruments for hedging foreign exchange risks. Indicator, UAHmn 01-Jan-13 01-Nov-13 01-Dec-13 Loans granted 815,327 868,507 889.938 Including: Loans to businesses 609,202 659,193 675,040 Loans to individuals 161,775 167,442 166,731 Long-term loans 394,246 406,755 411,255 Including long-term business loans 276,683 297,802 303,186 Overdue debt on loans 72,520 76,815 74,155 Investments in securities 96,340 127,327 128,069 Reserves against banks' operations 141,319 136,684 135,855 Source: NBU
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