S&P expects recovery of Ukrainian banks' indicators after COVID-19 pandemic
S&P Global Ratings, an international rating agency predicts the preservation of the stability of Ukrainian banks and expects their indicators to recover after coronavirus (COVID-19) pandemic.
"Subsidiaries of foreign banks and private Ukrainian banks will remain stable amid the pandemic and will resume growth in the retail and corporate segments," S&P said in the banking forecast.
According to it, the profit indicators of banks in 2021 will correspond to the level of 2020.
The agency predicts growth in the segment of retail and corporate loans and at the same time expects pressure on the net interest margin due to record low interest rates.
Analysts expect the cost of risk to remain high in 2021 at around 2.3%, up from 3% in 2020.
According to the S&P forecast, due to write-offs, the non-performing loans (NPL) in the banking system will decrease to 30% by the end of 2021 from 41% at the end of 2020.
At the same time, analysts aid that the main problems of state-owned PrivatBank, Oschadbank, Ukrgasbank and Ukreximbank (all Kyiv-based) in 2021 and 2022 will be "clearing" balance sheets from NPL issued in previous years, the implementation of effective business strategies, as well as improving the quality of corporate governance to prepare for partial or full privatization.