Te net profits of the Ukrainian banking system in January was UAH 652 mn, the National Bank of Ukraine has reported, , according to Kyiv Weekly. Encouraging, considering that the system suffered net losses of UAH 5 mn a year ago. Interest earnings accounted for the lion’s share of revenues having grown 3.8% to UAH 9.42 bn. Moreover, the volume of issued loans compared with December dropped 0.8%, or by UAH 6 bn. The credit portfolios of legal entities fell by UAH 4.9 bn and those of individuals – by UAH 1.1 bn, reads an article in the No 9 issue of KW.

Financial specialists attribute the growing earnings to the exorbitant interest rates on loans, which in the national currency grew to 25-30% per annum, despite the contraction of the volume of loans issued. Also, in January liquidity in the banking system started to improve. The residual of funds on the correspondent accounts of banks steadily fluctuated within the range of UAH 20-23 bn. Despite this, banks were slow to reduce interest rates on loans.

“In January, resources became cheaper because many clients have not yet restored active operations after the holiday and considerable residuals have accumulated on correspondent accounts. At the same time, loans were issued at high interest rates. In the beginning of the year the Finance Ministry effectuated major repayments of T-bills. This added to the liquidity of banks, which allowed them to increase lending volumes and increase their interest earnings in January,” Treasury Director of DV Bank Oleksiy Kozyrev toold the weekly.