The Volume of Non-Performing Loans of State Banks Decreased by 11% since the Beginning of the Year

Today, the Minister of Finance Ukraine met with the World Bank's Regional Director for Eastern Europe (Belarus, Moldova, and Ukraine) Arup Banerji. The meeting took place within the framework of the World Bank's Financial Sector Technical Assistance Mission on December 13-16.

The parties discussed the issues of resolving insolvency of banks, further development of capital markets, reduction of state regulation of banks. Among other issues raised were the issues of reforming the pension system and implementation of the new model of the Deposit Guarantee Fund (DGF).

Sergii Marchenko noted that an important component of the reform of state-owned banks is the reduction of the share of the state in the banking sector by 25%. For this purpose, the government of Ukraine has already approved the main directions of activity of Ukreximbank, Oschadbank, PrivatBank, and approved development strategies of Ukreximbank, PrivatBank, and Oschadbank.

One of the topics for discussion was to continue cooperation to sell shares of Oschadbank. A key element of cooperation is the completion of procedures for Oschadbank's joining the system for guaranteeing individuals' deposits.

On October 22, 2021, Oschadbank and the EBRD signed a mandate letter to begin work on a project for a possible long-term loan of up to EUR 100 million in subordinated debt with an option to convert into bank`s shares.

Also, they discussed the issue of reducing the share of non-performing loans (NPLs) to a certain level - up to 20%. Since the beginning of 2021, the volume of NPLs of banks in the public sector decreased by 35 billion UAH or 11%.

In addition, representatives of the World Bank noted that they support the reform of the pension system in Ukraine and will provide expert advice on the implementation of the second level of mandatory funded pension.