Study: Most banks in Ukraine show negative reputational ranking trend in Q2.

By bne IntelliNews September 27, 2012
In Q2, most banks in Ukraine showed negative reputational ranking trend, shows the survey conducted by NOKs fishes. Falling reputation of banks is very closely correlated with the market situation, writes Ekonomicheskie Izvestia newspaper, citing Andriy Prykhodko, an analyst with the investment group Altera Finance and a consulter of the study. According to him, banks' loan portfolio has lost USD 20bn (-17%), especially in high-risk lending to individuals (-30%) and in the group of Western banks (-25%). Deposits, on the contrary, continued to grow (+3%), the expert explained. This strategy of banks has put bank deposits at risk, he added. Thus, taking to the account complication of the economic situation in Ukraine and abroad, the rising apprehension of investment analysts about the situation in the domestic banking system and the corresponding negative trend of this rating was expected. Reputation of specific financial institutions depends completely on the image-making activities of banks' top management in response to economic developments. According to the study, the most dynamic in the media by the average total number of references were domestic banks, followed by Western subsidiary banks; banks with Russian capital are in the last place, but in terms of media response quality (exposure to informational reasons and background eventuality), Russian banks pushed the European aside. Prykhodko forecasts continuation of the same trends in H2/2012. The domestic economy will slow down amidst cooling in the global capital and commodity markets. Thus a further decline in lending as well as a reduction of banks' interest incomes and profitability of the banking system in general can be expected.

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