Head of the National Bank of Ukraine`s Financial Stability Department Vitaliy Vavryshchuk has stated that Ukraine`s banking sector is expected to demonstrate a positive financial result by the end of 2017.
”The financial performance of the banking sector as a whole will remain quite volatile. We will observe some significant changes from month to month. But in general, we see that the banking sector is entering into the positive zone. We are almost certain that the banking sector`s activity, as a whole, will be profitable in 2017,” Vavryshchuk said at a briefing presenting the first edition of ”Review of the Banking Sector” prepared by the regulator.
The survey shows low operating efficiency of the banks in Q1, with CIR indicator [cost to income ratio] amounting to 79% due to losses from foreign currency revaluation. At the same time, banks` performance improved in Q2 and Q3 as the result of profit from trading operations and reduction in funding costs.
Consequently, CIR indicator returned to the last year`s average level of 52%. At the same time, reducing allocations to reserves under asset-side operations enabled banks to improve their financial results and, since May 2016, the banking system had posted net profit during the three months out of four.
