Financial stability in Ukraine will be kept even if the second wave of coronavirus disease (COVID-19) begins, and all major banks in the country will be able to survive it, Board Chairman of Raiffeisen Bank Aval Oleksandr Pysaruk has said.

"All major banks – systemic, large, medium – I am sure they will survive... Some of the small banks may suffer, but it will not affect anything... I don't see any threat to financial stability," he said in interview with Interfax-Ukraine.

According to Pysaruk, after the work that the National Bank of Ukraine (NBU) did to reform the banking sector, fairly stable banks have remained on the market.

"The Ukrainian banking system, like Ukraine as a whole, from the point of view of macroeconomic indicators has entered this crisis in better condition than at any moment in the past 30 years since independence… Largely thanks to the work of the NBU and the Ministry of Finance, by the way, with the IMF support," he said.

He said that, according to the NBU Financial Stability Report, nine banks in the country may need additional capitalization, and two of them are state-owned. "Two well-known state-owned banks, which often lack capital, because their management quality is not good enough, the story is complicated. If they do not have enough capital again, the state will contribute it again," he said.

Pysaruk said that Raiffeisen Bank Aval has once again seen an increase in liquidity during the crisis, in particular, customer funds in deposit accounts have grown. "And we pay, probably, one of the lowest deposit rates on the market," he said.

According to Pysaruk, from March to May, the balances on the accounts of bank customers are both fixed-term and demand deposits expanded by 9%. "And we didn't do anything special for this. When the bank has high liquidity, it's good, but when it is too high it is not so easy to place it in profitable instruments. But we can do it," he said.

He said that in other banks, customer account balances are also growing, because Ukrainians began to trust the banking system, in contrast to the crisis in 2014, when they actively removed money from the system.

Pysaruk said that this year the net interest income of Ukrainian banks will decline, but not very significantly, if there are no sharp defaults. "The main factor of uncertainty is the costs associated with the creation of reserves for expected losses on loans and other assets... We will have a clearer picture of this in September-October," he said.

The top manager of Raiffeisen Bank Aval said that commission income on a year-on-year basis will also decline as transaction volumes have fallen and are recovering gradually. "Even without the second wave of the crisis, the pace of recovery will not allow reaching commission income at the level of last year," Pysaruk said.