Asset quality will be evaluated.
The National Bank of Ukraine (NBU) says it will resume stress testing and sustainability evaluation of banks operating in the country after a break caused by coronacrisis in 2020
The financial institutions' sustainability is expected to be analyzed within the period as of January 1, 2021. This refers to the evaluation of asset quality of all banks. Moreover, certain banks will undergo additional stress testing, the regulator's press service said on its website on February 9.
"The forthcoming sustainability assessment will focus on the state of banks' assets after the acute phase of coronacrisis. Special attention will be paid to restructured loans and the quality of real estate valuation. Last year's assets quality will be evaluated at 72 institutions with banking licenses out of 73," the report said.
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Background
On March 17, 2020, the National Bank eased a number of requirements for banks to support them during the coronavirus-related quarantine, in particular, postponed stress testing and on-site inspections. However, the regulator continued monitoring financial sector performance, including its liquidity and quality of loan portfolios.
On March 26, 2020, the central bank postponed the requirement for banks to comply with the capital buffer they accumulate during economic growth to compensate for possible losses in the event of an economic downturn.
Also, the NBU approved a procedure for regular remote inspection of non-banking financial services market participants.