The number of financial institutions, waiting for the deterioration of the situation in the next six months, rose

KIEV. May 29. UNN. Financial institutions consider the state of the sector is satisfactory, however, do not exclude deterioration in the next six months. This is evidenced by the results of the “Survey on systemic risks in the financial sector” in may of 2020, reports UNN with reference to the press service of the NBU.

“More than half of financial institutions believe the financial sector is satisfactory. Despite the deterioration of the assessment of respondents when compared with the previous survey conducted in November, about a third of managers are still optimistic about the current state of Affairs in the financial sector. At the same time, the share of respondents who believe the overall level of risk is high or very high, increased from 23% in November 2019 to 37% in may 2020”, — stated in the message.

It is reported that the same rose and the share of respondents who expect deterioration of the financial sector in the next six months: in November it was 4%, now 71%.

“Rapidly deteriorated evaluation of the banks risks associated with the level of economic activity and the dynamics of commodity prices — these factors for the first time since the beginning of the survey (may 2018) were in the top the biggest risks displacing the level of protection of the rights of creditors and investors, as well as the status of international financial organizations”, — stated in the message.

Also first place in the list of the largest risks, as well as on the results of four previous surveys, save a factor of corruption, law enforcement and the judicial system.

Only the five major risk factors (those that were the most significant in the aggregate estimation of the respondents in the categories “very high” and “high” risk) included:

  • corruption, law enforcement and the judicial system;
  • the level of economic activity;
  • the dynamics of world prices for commodities;
  • fraud and cyber threats;
  • the political situation in Ukraine.

“However, the factor of low risk for the financial sector financial institutions have identified the possibility of bankruptcy and/or significant financial difficulties”, — stated in the message.

In addition, banks have also become more careful — their appetite for risk has significantly declined, as noted by 42% of the interviewed top managers.

Help UNN: the survey was conducted from may 12 to may 25, 2020. The participants were the heads of 18 banks, 6 insurance and 3 investment companies. To sampling not hit the financial institution, against which the sanctions. The final results were not taken into account the size of the Bank/company or their market share — all the answers equal.

Recall, the NBU has simplified a number of procedures in the licensing of banks.