The NBU Financial Stability Council has identified systemic risks in the financial sector of Ukraine
The Financial Stability Council, at its meeting held on March 27, 2025, discussed systemic risks in the financial sector. Despite the growing geopolitical uncertainty, the economic situation and the state of the financial sector of Ukraine remain under control.
At the beginning of the year, inflation accelerated somewhat, but the inflationary momentum is gradually weakening. The increase in the discount rate by the National Bank contributes to a decrease in the inflation rate.
According to the forecast for January 2025, economic growth is expected to accelerate to 3.6% this year and to approximately 4% in the following years.
Risks to inflation dynamics and economic development remain significant due to the continuation of full-scale hostilities. External economic risks have also increased due to increased geopolitical polarization and fragmentation of world trade. At the same time, positive scenarios are possible, including a quick end to hostilities, large-scale infrastructure reconstruction, and increased financial support from international partners.
The expected volumes of external assistance will ensure the financing of budgetary needs and maintain the stability of the foreign exchange market.
Ukraine’s financial sector demonstrates stability in the inflow of funds to banks, which mainly rely on hryvnia funding. The liquidity of the banking sector remains at a high level and significantly exceeds the minimum regulatory requirements.
A sufficient level of funding provides conditions for active lending by all banking groups. In February, the annual growth of the net business loan portfolio amounted to 26.5%, while the value of subsidized business loans is gradually decreasing.
The retail loan portfolio also demonstrates active growth, especially in the segment of unsecured retail loans, such as card and cash loans. Mortgage lending is developed exclusively within the framework of the state program e-Housing, for the further development of which it is proposed to update the conditions.
The quality of the loan portfolio is gradually improving. During the year, the share of non-performing loans decreased by 6.3 percentage points and amounted to 30.5% at the end of January.
Due to the growing competition between banks for reliable borrowers, interest rates have gradually decreased over a long period, which ensured their availability.
The report notes that the banking sector of Ukraine is well capitalized, regulatory capital significantly exceeds the minimum regulatory requirements. The National Bank plans to update capital requirements after the completion of the current assessment of the stability of banks.
One of the new challenges for financial stability has been the spread of virtual assets. During the meeting of the Financial Stability Council, approaches to regulating this market were discussed.
The National Securities and Stock Market Commission presented its vision of the distribution of powers between future market regulators. The Council members agreed on the need for further in-depth consideration of the issue of regulation, taking into account the model that will be jointly prepared by the National Bank and the NSSMC.