Ukraine introduces annual assessment of banks' sustainability from 2018

NBU resolution No. 141 states that the assessment will consist of three phases.

Read alsoUkraine's solvent banks see over $65 mln in net profit in 11 monthsThe first phase suggests audits by audit firms from the audit firms' register; they will examine the quality of a bank's assets and collateral on loans.

The second phase includes projections to be made on the basis of the first phase and evaluation of a bank's capital adequacy as of the date of the assessment.

During the third phase, the NBU will estimate a bank's capital adequacy after stress-testing in keeping with the base-case and low-case macroeconomic scenarios for a three-year outlook.

All solvent banks in Ukraine will undergo the first and second phases, the NBU said. The list of banks for the third phase will be drawn up by the NBU depending on what impact each bank has on the country's banking system.

If the assessment reveals that a bank needs an additional injection of capital, it should develop a program to support or replenish its capital.

As UNIAN reported earlier, Ukraine's largest banks had taken measures by September 1, 2016, for additional capitalization estimated at UAH 108 billion, or US$3.86 billion, in total after the diagnostic testing of the country's top 20 banks conducted by the NBU in 2015.

In keeping with a plan for additional capitalization of Ukrainian banks, which was agreed with the International Monetary Fund, their capital adequacy should account for 10% in the next four years.