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The loan portfolio of banks in the public sector has decreased by UAH 1.5 billion since year-start.
Four state banks in the first half of 2020 reported UAH 16.2 billion in profit, which is 17% (UAH 3.4 billion) lower year-on-year, as reported by the Ministry of Finance.
Bank reserves
"Lower profits were primarily due to an increase in the cost of forming bank reserves," the Finance Ministry has explained.
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Since year-start, it is noted, the loan portfolio of banks in the public sector has decreased by 0.7% (UAH 1.5 billion).
Quarantine implications
"In the second quarter of 2020, against the backdrop of the COVID-19 pandemic, banks were observing a decrease in demand for loans. In general, demand for loans slid by 5.7% (UAH 13.1 billion) on year," the report reads.
At the same time, an increase is seen in the volume of customer funds for servicing the public sector banking system. In the first half of 2020, the volume increased by 10%, or by UAH 58.6 billion (in Q2 – by 3.6%, or by UAH 23.3 billion).
Salaries of top managers at state banks
On March 11, Ukraine introduced a nationwide quarantine to prevent the spread of coronavirus.
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On April 29, the Cabinet of Ministers capped salaries and bonuses for state-owned companies' top managers and members of supervisory boards at UAH 47,000 per month pending quarantine.
On the same day, the Cabinet of Ministers recommended limiting the salaries of top managers of state banks and members of their supervisory boards to ten minimum wages, which is UAH 47,230, also pending quarantine.