Share of banks' NPL decreases by 0.16 p.p. in Feb

The share of non-performing loans (NPL) in the banking sector as of March 1, 2024 decreased to 36.59% from 36.75% in February, mainly due to a decrease in problem loans to individuals by 0.45 percentage points (p.p.), to 22.35%, according to data from the National Bank of Ukraine (NBU).

The volume of loans in February did not increase as significantly as in the previous month: only by UAH 2.84 billion, to UAH 1.15 trillion, while in January their increase was recorded by UAH 13.44 billion.

The volume of non-performing loans in the system as a whole decreased by UAH 788 million, to UAH 419.67 billion, which is almost half the decrease in January.

According to the NBU, loans to legal entities have been declining for the third month in a row. In particular, in February their volume decreased by 0.09%, to UAH 818.80 billion as of March 1. The share of NPL among them decreased by only 0.01 p.p., to 44.4% in early spring.

The situation is similar with loans to state authorities and local governments; their volume has also been declining since the beginning of 2024, and in February dropped by another 2.7%, to UAH 17.23 billion. It is noteworthy that at the same time, the share of NPL in the portfolio increases proportionally from the beginning of December to the end of February of 2024, and by March it increased by 0.02 p.p., to 1.07%.

With individuals (including individual entrepreneurs), the situation is the opposite: their portfolio has been growing for the third month in a row, and in February increased by another 1.3%, to UAH 249.30 billion. At the same time, the share of NPL on household loans, after decreasing by 0.72 p.p. during January, dropped another 0.45 p.p., to 22.4% as of March 1.

According to the National Bank, the leaders in terms of NPL volume as of February 1, 2024 were PrivatBank with 179.95 billion problem loans, Oschadbank with UAH 68.20 billion, Ukreximbank with UAH 50.21 billion, Sense Bank with UAH 28.70 billion and Ukrgasbank with UAH 24.44 billion.

As the regulator recalled, before Russia's full-scale invasion of Ukraine, the share of NPL in Ukrainian banks had been declining since 2018 (from 55% to 27% as of March 1, 2022), and the volume of loans in banks was growing.