Ukrainian banking institutions’ efficiency falls - experts
During 1Q2008 the business efficiency ratio has decreased by 17%
Credit-Rating agency notes the falling efficiency of the banking institutions: during 1Q2008 the business efficiency ratio has decreased by 17 percentage points compared to the same period of 2007, according to the agency’s press-release, forwarded to UNIAN.
The key reason is the outrunning growth of interest expenditures over the revenues due to the increase in resource cost. With the purpose to minimize the influence of this factor and to improve the performance, some banks were obliged to reduce the expenditures no related to the their principal activities, to adjust their plans for territorial expansion of the network and to postpone the extensive development.
According to Credit-Rating’s leading financial analyst Viktor Shulik: “Further development of the banking institutions in the course of the year depends on general economic situation in the country and regulator’s actions. As before Credit-Rating expects the decrease in the efficiency of principal activities under further reduction of the loan portfolios’ growth rates, increase in the resource cost and growth of the troubled assets.
70 banking institutions with ratings assigned have been analyzed.