Transcript On Banks and Banking

Development of Ukrainian
Banking System
Main Legislative Acts that Regulate
the Banking System Activity
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Laws of Ukraine:
“On Banks and Banking”
“On the National Bank of Ukraine”
“On Economic Entities”
“On Individuals Deposit Guarantee Fund”
“On Securities and Stock Market”
“On Prevention and Counteraction of Legalization (Laundering) of Earnings Received
from Criminal Activities”
“On Ensuring Creditors Claims and Lien Registration”
“On Mortgage”
“On Mortgage Lending, Operations with Consolidated Mortgage Debt and Mortgage
Certificates”
“On Mortgage Bonds”
“On Organization of Forming and Circulation of Credit Histories”
General Characteristic
National Bank of Ukraine
Operating Ukrainian Banks
139
35
Co. Ltd
Joint Stock
Companies (JSC)
92
45
OJSC
CJSC
2
State owned banks
(OJSC)
3
The Number of the Ukrainian Banks
(as of October 01, 2007)
The number of banks registered in the State
Register of Banks– 196;
 The number of banks with banking licenses–
174;
 The number of banks with foreign capital– 44,
including 16 ones with 100% foreign capital
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4
Macroeconomic Situation and the Banking
System (as of October 01, 2007)
Banks assets to GDP ratio – 83%
 Credit portfolio/GDP – 67%
 Banks liabilities/GDP– 74%
 Individuals deposits/GDP – 22%
 Capital/GDP – 10%
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5
Dynamics of the Main Banking System
Indicators to GDP
90,00
80,00
70,00
60,00
%
50,00
40,00
30,00
20,00
10,00
0,00
01.01.2001
01.01.2002
01.01.2003
Assets
01.01.2004
01.01.2005
Credit portfolio
01.01.2006
Liabilities
01.01.2007
01.09.2007
01.10.2007
Regulatory capital
6
The Main Indicators of Ukrainian Banks
Activity (as of October 01, 2007)
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Assets – 509 billion UAH ( 71 billion Euro)
Credit portfolio -410 billion UAH (57 billion Euro)
Banks liabilities – 450 billion UAH (63 billion Euro)
Funds of economic agents– 105 billion UAH (15
billion Euro)
Deposits of individuals– 140 billion UAH (20 billion
Euro)
Regulatory capital– 61 billion UAH (9 billion Euro)
Dynamics of assets and credit operations
of Ukrainian banking System
600
500
billions UAH
508,6
477,1
383,8
400
410,3
340,2
300
269,7
213,9
200
100
37,1 23,6
47,6 32,1
01.01.2001
01.01.2002
63,9
100,2
46,7
134,3
73,4
156,4
97,2
0
01.01.2003
01.01.2004
Assets
01.01.2005
01.01.2006
01.01.2007
01.09.2007
01.10.2007
Credit operations
8
The Structure of Credit Operations
of Ukrainian Banking System
(as of 01.10.2007, %)
9,9%
58,9%
31,2%
credits granted to economic agents
credits granted to individuals
credits granted to other banks and NBU
Dynamics of credits granted by
Ukrainian banks (in the national and
foreign currency)
250,0
219,1
205,5 191,2
200,0
billions UAH
178,3
137,2
150,0
132,5
100,0
85,8
70,6
42,3
50,0
12,1 11,5 17,6 14,5
26,8
19,9
31,1
53,5
43,7
0,0
01.01.2001 01.01.2002 01.01.2003 01.01.2004 01.01.2005 01.01.2006 01.01.2007 01.09.2007 01.10.2007
Credits in the national currency
Credits in foreign currency
10
421,4
450,0
450,4
Dynamics of Liabilities, Funds of Economic Agents
and Individual Deposits
400,0
350,0
94,5
105,1
135,6
140,1
297,6
76,9
106,1
61,2
40,1
41,2
87,4
32,1
28,0
53,9
19,7
19,1
39,7
15,7
11,2
50,0
13,1
100,0
30,6
150,0
115,9
200,0
72,5
188,4
250,0
6,6
billions UAH
300,0
01.09.2007
01.10.2007
0,0
01.01.2001
01.01.2002
01.01.2003
Deposits of individuals
01.01.2004
01.01.2005
01.01.2006
01.01.2007
Funds of economic agents
Liabilities
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Dynamics of Individuals Deposits
in Ukrainian Banks
90,0
80,5
77,5
80,0
70,0
billions, UAH
58,1
57,1
60,0
59,6
49,0
50,0
41,6
40,0
31,0
30,0
20,0
10,0
21,7 19,5
18,6
3,3 3,3
6,4 4,8
11,3
13,5
7,8
0,0
01.01.2001 01.01.2002 01.01.2003 01.01.2004 01.01.2005 01.01.2006 01.01.2007 01.09.2007 01.10.2007
Deposits in the national currency
Deposits in the foreign currency
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Dynamics of the Regulatory Capital and Capital
Adequacy Ratio of Ukrainian Banks
58 365
40 000
18,01
15,11
15,53
30 000
20 000
5 148
8 025
10 099
13 274
16,81
18 188
25
20
14,95 41 148
14,00
26 373
13,89
15
%
50 000
61 155
20,69
60 000
14,19
10
5
10 000
Regulatory capital
01.10.07
01.09.07
01.01.07
01.01.06
01.01.05
01.01.04
01.01.03
0
01.01.02
0
01.01.01
millions, UAH
70 000
CAR
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Millions, UAH
Dynamics of Profitability
of Ukrainian Banking System
4500
4000
3500
3000
2500
2000
1500
1000
500
0
-500
4 223
3 882
4144
1,27%
532
1,27%1,04%
685
827
1,50%
1,31%
1,61%
1,07%
1263
2,00%
1,47%
1,38%
2170
1,00%
0,50%
0,00%
-30
-0,09%
1
2
.0
.0
1
1
.0
.0
01
01
3
.0
1
.0
01
4
.0
1
.0
01
5
.0
1
.0
01
Profit
6
.0
1
.0
01
07
0
.2
01
.
01
07
0
.2
09
.
01
07
0
.2
10
.
01
-0,50%
ROA
14
Foreign capital participation
in Ukrainian banking system
number
50
40,0
35,0
32,8 35,0
40
35
30,0
27,6
25,0
30
23
22
21
20,0
20
19,5
19
19
17
16
%
20
15,0
13
13,7
13,3
9,6
12,5
11,3
9
10,0
7
7
7
7
6
10
5,0
0
0,0
01
02
03
04
05
06
07
07
07
0
0
0
0
0
0
0
0
0
.2
.2
.2
.2
.2
.2
.2
.2
.2
1
1
1
1
1
1
1
7
0
.0
.0
.0
.0
.0
.0
.0
.0
.1
1
1
1
1
1
1
1
1
1
0
0
0
0
0
0
0
0
0
42
44
Banks with foreign capital
Banks with 100% foreign capital
Share of foreign capital in banks authorised capital, %
15
Share of Foreign Capital
in the Total Amount of Foreign Capital of Banks
in the context of countries (%)
Other
countries; 12,2
Austria; 18,9
Hungary; 5,0
Sw eden; 6,3
Cyprus; 16,4
Netherlands; 9,3
France; 14,5
Russian
Federation; 9,2
Poland; 8,2
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Changes in the Legislative Base
Introduced in 2006
1.
2.
3.
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Changes to the Law of Ukraine “On Banks and Banking” regarding the
form of banks establishment (OJSC) and increase of the minimum
authorized capital necessary for a bank registration up to 10 million
Euro.
Changes to the Law of Ukraine “On Bank and Banking” which
provided for the right of foreign banks to open branches on the
territory of Ukraine.
Law of Ukraine «On Introducing Changes to Certain Laws of Ukraine
Concerning the Improvement of Legal Regulation of the International
Cooperation in the Area of Terrorism Financing Prevention” (effective
from January 1, 2006).
Legislative Acts under Consideration of
Verkhovna Rada of Ukraine
1. Draft law on introduction of changes to certain Laws of Ukraine (with
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regard to the regulation of banks activities) which envisages including the
following:
improvement of banks state registration procedure;
more clear procedures regulation of determination of beneficial owners of
banks;
enhancement of cooperation between supervisory bodies and external
auditors of banks as well as peculiarities of conducting audit examinations
of banks.
(This Draft law has passed the first reading in January 2007).
2. Draft law on introduction of changes to certain Laws of Ukraine aimed at
strengthening the role of Individuals Deposit Guarantee Fund in the
development of the banking system.
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Draft Laws to be submitted
to Verkhovna Rada of Ukraine
1.
2.
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Draft Law on introduction of changes to the Law
of Ukraine “On Banks and Banking” which has
been prepared aimed at the improvement of
corporate governance in banks.
Draft Law on introduction of changes to the Law
of Ukraine “On Banks and Banking” aimed at the
development of consolidated supervision.
The work conducted during 2007 aimed at
Development of Effective Banking
Supervision
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Approved the new version of Regulation about the order of provision
formation under the securities-related operations of banks of Ukraine
(resolution of the NBU Board of 02.02.2007 #31);
approved the Rules of furnishing the consumers with information about
crediting terms and aggregated costs of the loan by banks of Ukraine
(resolution of the NBU Board of 10.05.2007 #168);
methodical recommendations approved in relation to improvement of
corporate governance in the banks of Ukraine (resolution of the NBU Board
of 28.03.2007 # 98);
amended the «Instruction about the order of regulation of banking activity in
Ukraine» (resolution of the National bank of Ukraine of 19.02.2007 #52);
amended the Regulation about the order of formation and use of the loan loss
provisions by banks (decisions of the NBU Board from 19.03.2007 # 83, of
06.07.2007 # 248 ).
Defects to be eliminated for
providing of further development and
reliability of the banking system
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growth of risks owing to swift growth of crediting volumes, first of all,
consumer credits and crediting in foreign currency;
insufficient level of banking capital concentration and its dispersion among
a significant number of small banks;
presence of the substantial risks connected with imbalance of the assets and
liabilities by maturities;
insufficient level of corporate governance, which results in the presence of
failings in the systems of risk management, internal control, cases of
violation of legislation and regulations of the National Bank of Ukraine;
insufficient transparency of the banking sector.
Tasks of the National Bank of Ukraine
on the Way of Further Development of
Ukrainian Banking System
• Further improvement of banking supervision by means of
introducing the risk-based supervision
• Increase of banks capital concentration and improvement of
its quality
• Introduction of supervision on consolidated basis
• Improvement of corporate governance and risk management
systems in Ukrainian banks
• Enhancement of banking system transparency
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