Results of Stress Testing of Banks in Ukraine
The National Bank of Ukraine (NBU) has published the results of the stress testing of banks, which included an assessment of asset quality (AQR) and the stress testing of the largest financial institutions in Ukraine. The results of the AQR showed that practically no adjustments to the prudential reserves were needed, indicating stability in the banking sector.
The NBU returned to the pre-war practice of stress testing, using two macroeconomic scenarios: baseline and adverse. According to the results of this year's stress testing, the total capital of the banks increased under both scenarios. A total of 21 financial institutions participated in the testing, accounting for over 90% of the banking system's assets. Among them, 12 banks passed the stress testing without establishing necessary capital adequacy levels.
Restructuring Programs and Bank Commitments
For those banks identified as needing capital, restructuring programs are already being implemented. It should be noted that these programs did not foresee recapitalization from owners but included plans to increase capital from profits. Financial institutions must achieve the necessary capital adequacy levels by the end of this year under the baseline scenario, and under the adverse scenario – by October 2026. This indicates the commitment of the banking sector to ensure its resilience in difficult economic conditions.
The results of the stress testing confirm the NBU's efforts to stabilize the banking system amid economic instability. Given the current challenges, particularly related to the war and its consequences, it is crucial for financial institutions to adhere to their commitments to maintain capital adequacy, which can foster trust among depositors and investors in Ukraine's banking sector. Supporting financial stability will be a key factor for the recovery of the economy in the future.