All Ukrainian banks have been obliged to ensure the regulatory capital adequacy requirement (N2) at the level of at least 5% by February 1, 2016 bring it to at least 7% by late 2017, and return it to the pre-crisis level of 10% and higher by late 2018.
The decision is stipulated in National Bank of Ukraine (NBU) resolution No. 313 of May 12, 2015 which has been posted on the central bank's website. The resolution takes effect on May 15, 2015.
According to the resolution, banks with the current N2 requirement from 7% to 10% are to increase it to over 10% by early 2017.
As for the rest of economic requirements which banks do not observe due to the hryvnia devaluation after February 6, 2015, the NBU has demanded that infringements must be removed by 2017 if the deviation from the requirement was up to 5 percentage points. If the deviation was from 5 to 10 percentage points, the banks are to do this by 2018, and if the deviation was more than 10 percentage points – by 2019.
The NBU obliged all banks to submit detailed plans on measures to remove the above-mentioned infringements by September 1, 2015 and banks are obliged to report on the implementation of the plans every quarter.
The NBU also approved the format for the measures plan, which is to contain a capitalization or restructuring program, quarterly realistic schedules for bringing indicators in line with requirements. The NBU Board will approve the measures plan for each bank.
The regulator also decided against applying measures to banks which violated economic requirements due to the hryvnia devaluation after February 6, 2015 due to banks facing losses related to the revaluation of accounts in foreign currency and banking metals and formation of reserves and for the increase of the share of badly classified assets to 10% and more of the total assets which are used to calculate risks and form reserves.
