Share of bad loans of 20 largest banks reaches 53% in 2015
The stress tests of 20 largest banks conducted by the National Bank of Ukraine (NBU) in 2015 determined the share of bad loans (the two worst loan quality types) at 53% of total credit portfolio, Director of the financial stability department at the NBU Vitaliy Vavryschuk has said, presenting a first financial stability report of the central bank.
"The most troubled loans are currency-pegged loans issued to individuals – 88% were put on fourth and fifth categories after stress tests. The worsening of the quality of the individuals' credit portfolio is linked to devaluation of the hryvnia and the worsening of their financial state,"
The NBU said that the fourth quality category includes loans with 51-99% default risk and the fifth category – default loans.
"The structure of the portfolio quality was broadly reclassified for loans issued to economic entities. According to banks' reports as of the date of conducting stress tests the share of bad loans was only 20%. After the first phase of stress tests it grew to 31% and after the stress test – to 51%," the NBU said.
Vavryschuk said that thanks to macro-economic stabilization, the improvement of the situation on some foreign commodity markets and the slight restoration of the economy the assessment of risks of the above-mentioned loans could be revised.
