Ukraine sees increase in overdue loans but banks aren't taking debtors to court

Ukraine sees increase in overdue loans but banks aren't taking debtors to court
Non-performing loans in Ukraine's banking sector are back and rising fast. / bne IntelliNews
By Dominic Culverwell in London March 15, 2023

Ukraine saw an increase in overdue loans last year, rising from 34% to 39%, Ukraine Business News reported on March 14. (chart)

However, the number of debtors taken to court has dropped. In 2022, there were 37% less court cases than the previous year, with Ukrainian banks participating in 56,670 court cases.

Even Ukraine’s largest banks, the state-owned PrivatBank and Oschadbank, filed half the number of cases compared to those they had filed before the full-scale invasion. The commercial institution A-Bank saw the largest drop of 200%.

As such, analysts think that banks will likely sell the debt to third parties, which could lead to an increase in losses, and elevates the risk of corruption.

Ukraine's public debt rose by 4.55% in January to $116bn, according to the Ministry of Finance. This increase amounted to $5.06bn in dollar terms, and UAH185.35bn in hryvnia terms, bringing the total to UAH4.26 trillion.

Ukraine’s debt to GDP ratio has been climbing steadily but is still considered to be at manageable levels. At the end of 2022, the ratio of public debt to GDP was estimated at 84.4%, and according to the IMF and NBU forecasts, it will not exceed 100% in the medium term.

NPLs % of loan book

     
 

Dec 20

Dec 22

Dec 23

ratio of non-performing loans, %

42.03

30.67

38.24

incl. banks:

     

with state participation, of which:

58.07

48.48

51.93

PrivatBank

74.42

69.45

67.48

state banks ex-PrivatBank

44.09

30.27

40.42

Foreign owned

29.05

17.87

20.46

Privately owned

16.28

9.59

23.75

Insolvent

0

0

0

Source: NBU

     

 

Data

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