The share of non-performing loans decreased by 1 percentage point in November, according to the National Bank of Ukraine.

The share of non-performing loans (NPL) in the banking sector decreased by 1 percentage point in November, reaching 31% as of December 1, 2024, which is 6 percentage points lower than the beginning of the year.

This was reported by the press service of the NBU.

According to the regulator, in November, the volume of NPL in banks reduced by nearly 1 billion UAH, while the total volume of loans provided by banks increased by 37.5 billion UAH.

“Overall, in the first 11 months of 2024, the volume of NPL in banks decreased by 8 billion UAH, while the total volume of loans provided by banks grew by 187 billion UAH,” the statement noted.

At the same time, the share of non-performing loans for individuals as of December 1, 2024, was 17%, and for businesses, it was 40% (25% excluding debts of former owners of PrivatBank and old debts from the 2014-2016 crisis).

Furthermore, as noted by the National Bank, the quality of the portfolio is improving. In the retail portfolio over the last 12 months, the migration of UAH loans to the third stage under IFRS 9 has decreased to 4% (relative to the volume of loans in the first and second stages) and has already reached pre-war levels. In the corporate portfolio, about 4% of borrowers defaulted over 12 months, which is also comparable to pre-war indicators.

“Resolving NPL is one of the priorities of the Lending Development Strategy. The National Bank, together with the IFC, will work on the legal framework for establishing Asset Recovery Companies (ARC) in Ukraine to further enhance the resilience of the banking sector and its ability to increase lending,” the NBU added.

Reference.

The regulator reminded that before the full-scale invasion of Russia into Ukraine, the share of NPL in Ukrainian banks had been decreasing since 2018: from 55% to 27% as of March 1, 2022.

Background. Previously, Mind reported that the creation of a bad bank based on a nationalized small state bank could be a solution for NPL. During the war, the portfolio of “bad loans” increased by 37%.