National Bank expands list of Ukraine's systemically important banks

The National Bank of Ukraine (NBU) has identified 14 banks as systemically important ones in accordance with the updated methodology.

In particular, the updated list includes PrivatBank, Oschadbank and Ukreximbank, all previously recognized as systemically important, as well as new financial institutions, namely, Ukrgasbank, Alfa Bank, Ukrsotsbank, Raiffeisen Bank Aval, FUIB, UkrSibbank, TAScombank, Universal Bank, Kredobank, OTP Bank, and Pivdennyi Bank, the regulator said on its website on July 1.

According to the NBU, systemically important banks must meet tougher requirements. In particular, starting from January 1, 2020, such banks shall have at least a 30% instant liquidity ratio (H4), while their maximum credit risk per counterparty (H7) shall not exceed 20%.

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Moreover, in addition to the normative value of capital adequacy, the financial institutions shall form a systemic importance buffer, which will take effect on January 1, 2021, and will depend on the value of the bank's systemic importance indicator.

In particular, the buffer is set to be 1% for Raiffeisen Bank Aval, Alfa Bank, Ukrsotsbank, FUIB, UkrSibbank, TAScombank, Universal Bank, OTP Bank, Pivdennyi Bank, and Kredobank, while it shall be 1.5% for Ukreximbank and Ukrgasbank, and 2% for PrivatBank and Oschadbank.

In addition, the financial institutions will need to develop a resumption plan for the rapid stabilization of their operation amid crises.

However, the systemic importance status in no way guarantees banks special conditions for maintaining liquidity in stress periods and receiving funds for capitalization from the government, the regulator said.

Noteworthy, after losing its systemic importance status, the said banks must adhere to tougher requirements for another 12 months.

As UNIAN reported earlier, the National Bank in 2018 remained unchanged the country's list of systemically important banks, which included the major state-run banks, that is, PrivatBank, Ukreximbank, and Oschadbank.

A systemically important bank is a financial institution, whose bankruptcy or improper functioning could threaten the country's entire financial system.