Non-performing loans (NPLs) in Ukraine’s banking sector decreased by UAH7bn ($190mn) in one month, Ukraine Business News reported on July 3.
On June 1, NPLs were at 39.1%, down from 39.3% at the start of May, reaching the same level as January 1, according to the National Bank of Ukraine (NBU). NPLs decreased by UAH7.1bn in May, whilst the total volume of the loan portfolio decreased by UAH13.2bn.
Problem loans have plagued Ukrainian banks, rising from 30% to 38% in 2022 to UAH432bn. To combat the problem, Oschadbank, which recorded UAH65.9bn ($1.8bn) worth of NPLs in December 2022, has an ongoing dialogue with debtors, offering loan repayment holidays to allow clients to adapt to the new business environment and gradually resume payments to the bank.
“If the debtor is willing to co-operate, we also apply voluntary debt settlement instruments- restructuring (currently short-term), voluntary sale of collateral, etc,” CEO Sergii Naumov told bne IntelliNews in an exclusive interview.
One of the major problem sectors is the renewable energy industry, which has seen a surge of NPLs, increasing to 51% at the start of May. Green energy loans make up nearly 4% of the total loan portfolio, with state-owned banks owning over 75% of the sector’s loans. The full war has escalated issues that existed before.
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