Solvent banks boosted capital by a total of UAH 45.1 billion, including UAH 30.4 billion by foreign banks / Photo from arenanews.com.ua
Another UAH 120 billion in additional capitalization should be injected in Ukraine's banking system in the next three years, according a macroeconomic outlook released by Investment Capital Ukraine LLC (ICU).
"According to our estimates, the banking system requires another UAH 120 billion in additional capitalization in the next three years," the outlook quotes ICU Financial Analyst Mykhailo Demkiv as saying.
He stresses that the additional capitalization and acknowledgement by banks of their real losses will make them more attractive in the eyes of potential investors.
"The proof that such a process has already begun is the talks between Alfa Group and Unicredit Group on the acquisition of Ukrsotsbank," he added.
Solvent banks boosted capital by a total of UAH 45.1 billion, including UAH 30.4 billion by foreign banks.
"Even though the parent structures of these banks [with foreign capital] have swapped debt instruments [i.e. loans] for shares without injecting actual funds, such operations, in our view, have had a positive effect," he said.
Although the banks expanded their reserves to a more realistic level, the situation on the market doesn't mirror the real depreciation of assets, ICU stressed.
ICU estimates the share of bad loans as of the first half of 2015 at 24.3%, and another 25-30% of the banks' loan portfolio has already been re-profiled.
"The share of interest accrued but not paid is 9.2% of the loan portfolio, which is UAH 100 billion, according to our estimates. In the first half of 2015, this indicator climbed by 1.8%. This demonstrates that banks fall short of a considerable share of interest income against the backdrop of high costs of attracted financing," he said.