Ukrainian banks suffer from overdue loans

Some financial institutions may not for years to solve such problems

In Ukraine there are several banks that for several years can not solve the problems of non-performing loans (Non-performing loan, NPL). This was stated by acting head of the National Bank of Ukraine (NBU) Ekaterina Rozhkova.

“We still have the problem of banks that have no business models. There are also some banks which, unfortunately, still not solved the problem of 2015 – they are in a border situation. In 2015, they took on the balance sheets of all sorts of assets to close the NPL problem. In 2016-2019 they are, these assets are not sold. The result – a huge amount of non-performing assets, starts to clean up the liquidity because you have to pay for deposits to pay wages. They all waited, when the market goes up to close the NPL problem,” said Rozhkova in an interview to “Interfax-Ukraine”.

Rozhkov also noted that a law banning the quarantine penalties for overdue payments on loans, had a negative impact on the financial system.

“It is the psychological factor. You the law said not to charge, not to fine. And everyone is missing the lever. Because what lever left? In addition, you can take the collateral if the collateral is. And before that it was the lever that you would include fines and penalties, and then transmit to collectors, they will come, and will use their tools of recovery. Plus your credit history will be ruined. And when no leverage there, and with customers barred from claiming in this period, so they do not pay. But not all. Many Bank customers, I’ve studied it from the point of view of consumer, I try to pay at least something,” said Rozhkov.

Not enough capital: Rozhkova told about the condition of the state banks of Ukraine