Ukrainian banks report record profits
Ukrainian
banks have achieved a remarkable milestone in the first eight months of
2023, recording a profit of UAH 95.1 billion ($2.5 billion), according to National
Bank of Ukraine (NBU) data.
The figure is a staggering 11.3 times higher than the earnings for the same period in 2022, which amounted to UAH 8.4 billion ($226 million).
According to the NBU, this performance represents an all-time high in Ukrainian banking history. Prior to this, the highest net profit for the first eight months of a year was seen in the pre-war year of 2021, with UAH 45.6 billion ($1.2 billion), surpassing the figures of UAH 32.6 billion ($878 million) in 2020, and UAH 44.3 billion ($1.2 billion) in 2019.
However, it’s worth noting that the profit for Ukrainian banks in August 2023 saw a decline, totaling UAH 11.9 billion ($320 million) compared to UAH 15.5 billion ($418 million) in July. This marks the fifth-highest monthly figure for the year in terms of profit.
The net interest income of Ukrainian banks for the first eight months of 2023 reached UAH 129.3 billion, a notable increase of 40.8% compared to the same period in the previous year. Additionally, net commission income amounted to UAH 33.4 billion ($900 million), marking a 14.1% rise.
When compared to July, net interest income increased by only 1%, reaching UAH 17.91 billion ($482 million), while net commission income grew by 2.1%, totaling UAH 3.92 billion ($106 million).
The decrease in profits in August can be attributed to several factors, including a 5.3-fold increase in provisions, reaching UAH 1.62 billion ($44 million), a 24.2% rise in other operating expenses, totaling UAH 1.47 billion ($40 million), and a 37.8% increase in income tax, amounting to UAH 2.65 billion ($71 million).
In total, banking reserve contributions for the first eight months of 2023 amounted to UAH 6.5 billion ($175 million), whereas during the same period in the previous year they were at UAH 89.4 billion ($2.4 billion).
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