The NBU has posted the findings of its resilience assessment of banks, with a breakdown by bank. These results are available in the section Banking Supervision – Diagnostics of Banks. As previously reported, a resilience assessment includes an asset quality review (AQR) and – for the largest banks – stress testing.
Thirty banks that jointly account for 93% of banking system assets have been stress-tested this year. Bank Stress Testing Approaches were published in May 2021.
As a result of the resilience assessment, the NBU set the capital adequacy ratio above the minimum requirement for a number of banks. This target level was calculated in a way that leaves banks with enough capital to absorb potential losses under stress events.
The target capital adequacy ratios were identified based on banks’ balance sheets at the start of 2021, but for many banks they were revised (downwards) after taking into account the measures actually taken and planned under restructuring programs. The revision was informed by the measures aimed at mitigating the risks of banks’ activities.
Under the baseline macroeconomic scenario, the NBU increased the required capital adequacy ratios for only nine banks. Yet under the adverse scenario, the capital adequacy ratios were raised for 20 banks.
Nine banks have successfully passed the stress testing this year. Those include, for the most part, financial institutions with foreign capital, as well as state-owned PrivatBank. FUIB and A-Bank do not need additional capital either, according to stress test results.
All banks for which capital requirements were identified have already developed and agreed with the NBU their capitalization and restructuring programs. Going forward, financial institutions must deliver on these programs in order to reach the required capital adequacy ratios: by the end of this year for banks requiring capital under the baseline scenario, and by 30 June 2022 for those in need of capital under the adverse scenario.
Taking into account the restructuring/capitalization programs greenlighted by the NBU, only five banks, as of early December, were in violation of the required capital adequacy ratios identified for the adverse scenario.