2017 Key Indicators
2017 Key Indicators
UAH 491 billion1
UAH 571 billion1
NBU Governor's Address
NBU Governor's Address
In 2017, the NBU proved its mandate as an independent central bank, by channeling all its energies to delivering price and financial stability. The central bank managed to achieve macroeconomic stability, which promoted economic growth in Ukraine, as evidenced by 2.5% growth in real GDP in 2017.
Headline inflation hit 13.7%, and was higher than the central bank’s target range of 8% +/- 2 pp. The NBU is convinced that in the coming years inflation will gradually decrease, reaching its mid-term target of 5% in 2020. The adoption of a tighter monetary stance in the autumn of 2017 had the precise aim of bringing inflation back to its target, using inflation targeting tools.
Last year, the NBU remained committed to a floating exchange rate. With benign external market conditions, the gradual recovery of macroeconomic stability and support from international financial institutions, the NBU was able to increase international reserves to their pre-crisis level (USD 18.8 billion), while at the same time preventing pressure on the hryvnia.
This also delivered the right conditions for the continued relaxing, and even removal, of FX restrictions.
In addition, in 2017, the central bank laid the foundations for Ukraine’s long-awaited transition to eased FX controls.
The NBU has drawn up a draft foreign exchange law, which will replace the outdated Decree of Foreign Exchange Regulation and Controls adopted in 1993. Through adopting this law, Ukraine will discharge the obligations of ensuring free flow of capital it assumed when it signed the EU-Ukraine Association Agreement.
By gradually lifting all existing restrictions, Ukraine will finally achieve the freedom of FX transactions. Businesses and households will be free to make their own decisions related to FX transactions, without having to obtain permission from the regulator. Restrictions will only be applied in turbulent times to prevent or address crises, and to deliver financial stability in the country. This is a required and long-awaited move towards Ukrainian bankers and businesses that want to operate on the international market and foreign investors that are interested in the Ukrainian market.
Reviving lending is one of the NBU’s top priority goals for 2017 and 201 that the regulator is gradually achieving. Indeed, since the start of 2017, hryvnia corporate loans have risen by 8.7%, with hryvnia household loans growing by 38.3%.However, the complete revival of lending requires putting in place laws to protect the rights of creditors, as well as measures to deal with toxic assets. The NBU is directly involved in drawing up and discussing the relevant draft laws in parliament.
In 2017, the banking system’s operating income grew by 10%, which was in line with the regulator’s expectations. However, the banking sector recorded losses of UAH 24.4 billion in 2017, due to banks – mainly the four largest banks, including PrivatBank – setting aside large provisions. A positive development last year was the reduction in the number of unprofitable banks to 18, down from 33.
All of the 82 banks that were operational in early 2018 had transparent ownership. Most of them completed their three-year capitalization programs ahead of time, and decreased the maximum permissible level of credit risk arising from related-party transactions, as required by the regulator. In 2017, the banks increased their own authorized capital to UAH 495.4 billion.
All of these actions are aimed at enhancing the resistance of the banking system to stresses and external shocks. The central bank has introduced risk-based supervision in order to prevent illegal banking schemes from returning to the market. This supervisory approach is seen as a foundation stone for putting in place effective AML/CFT mechanisms. Banks are now required to take action in the area of AML/CFT commensurate with existing risks, and to pay more careful attention to high-risk clients.
The NBU itself is changing for the better – it is becoming more transparent and accountable to the general public, improving its policy-implementation tools, and making its internal processes more efficient.
The NBU has a clear strategic vision and a well-defined program – it has drawn up and presented a central bank strategy for the first time since Ukraine became independent. The regulator has set seven targets that it will strive to achieve in the near future. Apart from delivering its statutory mandate of maintaining low and stable inflation, and ensuring the banking system is both stable and efficient, the NBU will be involved in efforts to revive lending and ensure there is a smooth transition to free capital movement. This will deliver the proper conditions for the sustainable development of the banking sector. The NBU has also set new and ambitious tasks in conducting the effective regulation of the entire financial sector, and promoting financial inclusion. I am convinced that by achieving these goals, Ukraine’s banking system will be successfully integrating into the European financial environment.
The NBU is aware that it is facing new challenges and tasks. Let us move forward in order to attain our common goals and achieve strategic objectives.
Strategy of the National Bank of Ukraine
Strategy of the National Bank of Ukraine
Low and stable inflation
The NBU aims to achieve controlled and predictable inflation in the long term, with the 2020 target being 5% +/- 1 pp. Low and stable inflation, in turn, will help maintain purchasing power, savings, as well as corporate and household income.
Stable, transparent, and effective banking system
The NBU intends to attain this goal by establishing effective practices for supervising financial institutions, including through risk-based supervision and requiring banks to meet liquidity and capital adequacy ratios based on EU directives and the Core Principles for Effective Banking Supervision. The security of deposits and reasonable loan rates will signal to customers that the banking system is stable.
Resumption of lending
The resumption of lending requires launching a credit register, decreasing the amount of NPLs, and enhancing the protection of consumer and creditor rights. The successful achievement of this goal will make loans more accessible to households and businesses, while at the same time not creating additional risks to financial stability.
Effective regulation of the financial sector
Determining a target model for regulating the non-bank financial sector is expected to contribute to the effective regulation of the insurance, leasing and factoring service markets, credit unions, credit bureaus, pawnshops and other financial companies. This will make the financial sector transparent and safe for financial service consumers, and extend the scope of more reliable and easily accessible financial services.
Free flow of capital
With a view to delivering free flow of capital, which is governed by EU principles, the NBU has cancelled FX restrictions and come up with suggestions for an entirely new FX law. This is expected to improve Ukraine’s financial climate, and ultimately, provide new opportunities for conducting business and integrating into the European financial market.
Financial inclusion will be achieved by making the financial market more effective and improving the financial literacy of the general public, as well as by delivering an effective and reliable payment infrastructure and easily accessible financial services.
A modern, open, independent, efficient central bank
Executing basic functions
Executing basic functions
Monetary Policy and Financial Markets
Payments and Settlements
Banknotes and Coins
Key Financials of the National Bank of Ukraine
NBU assets and liabilities in 2016-2017, UAH million
Funds and deposits in foreign currency and investment metals
Loans to banks and other borrowers
Internal state debt
IMF quota contributions
Property and equipment and intangible assets
Banknotes and coins in circulation
Accounts of banks
Accounts of government and other institutions
Liabilities on profit distribution to the state budget
Certificates of deposit issued by the NBU
Liabilities to the IMF, except for IMF quota contributions
Liabilities to the IMF for IMF quota contributions
General and other reserves
Revaluation reserves for assets and liabilities
Board of the National Bank of Ukraine
Governor of the NBU since 15 March 2018.
Acting Governor since 11 May 2017 to 15 March 2018. First Deputy Governor of the NBU since October 2016.
Yakiv Smolii has worked in Ukraine’s banking sector for more than 25 years, since its establishment after the country’s got independence. In 1991-1994, he worked at the NBU's Regional Branch in Ternopil oblast. Until 2005, he served as deputy chairman of the board at JS Postal Pension Bank Aval. From 2005 until 2014, Yakiv Smolii served as director of banking business at Prestige-Group.
He graduated from the Ivan Franko National University of Lviv majoring in Applied Mathematics. He holds a PhD in Economics.
Governor of the NBU since 19 June 2014 to 15 March 2018.
She has over 20 years of experience in management positions at leading Ukrainian and international financial institutions. Before her appointment as NBU governor, she was head of the Investment Board and later managing director at Investment Capital Ukraine Asset Management Company, LLC.
She also held various positions at ING Bank Ukraine JSC, from head of Resource Management to first deputy board chair.
At Société Générale Ukraine JSC she was head of the Resource Management Division and later head of the Resource Management Department. She has also worked at the Ukrainian Interbank Currency Exchange.
Valeria Gontareva graduated from the Kyiv Polytechnic Institute with a major in Optical Electronic Instrument Engineering and holds a degree in International Economics from the Kyiv National Economic University.
He is responsible for monetary policy, macroprudential policy to ensure financial stability, economic analysis, collection and analysis of statistics and reporting, and research.
In 2002, he started his career as a research associate at the Institute for Economic Research and Policy Consulting (IER). From 2004, he worked as a research economist at the IMF Resident Representative Office in Ukraine. From 2007 to 2015, prior to joining the NBU, he was head of analysis and research at Raiffeisen Bank Aval PJSC.
Mr. Sologub graduated from the Belarus National University with a major in Theoretical Economics. Later, he obtained a Master’s Degree in Economics (EERC) at the National University of Kyiv-Mohyla Academy. He is a CFA Charterholder.
Kateryna Rozhkova is in charge of prudential supervision. Kateryna Rozhkova has been working in Ukraine’s banking system since 1998. For more than 12 years, she held management positions of a deputy chair, board member, and advisor to the chairman of the board at Erste Bank PJSC, deputy chair of the board at Finbank PJSC, and acting chair of the board at Platinum Bank PJSC. In 2009, she worked as director of the NBU Off-Site Supervision Department for half a year. Between 10 June 2015 and 18 January 2016, she held the position of director of the Banking Supervision Department at the NBU.
Kateryna Rozhkova graduated from the Kyiv National Economic University with a major in Finance and Credit – Bank Management. She also holds a degree in International Business Management (MBA) from the International Institute of Management (IMI-Kyiv).
He is responsible for open market operations, foreign exchange regulation, and operations of the NBU Depository.
His professional activity in the financial sector began in 1993 and he has more than 10 years of experience in management positions. He began his career at INKО JSB in the international settlements office. Throughout his career, he managed securities transactions at VABank JSC, Spivdruzhnist investment company, and BNP-Dresdner Bank Ukraine JSCB. From 1999 to 2007, he has worked as chief treasury dealer and head of treasury at Bank Austria Creditanstalt Ukraine JSC (in 2002, the bank changed its name to Hypovereinsbank Ukraine JSC). For the following three years, he served first as deputy head and then as head of the Investment Business Department at Ukrsibbank JSCIB. From 2010 to 2014, he was in charge of Fixed-Yield Market Operations at VTB Bank PJSC.
He completed a degree in Economics from the Higher School of Banking of the International Center for Market Relations and Entrepreneurship, majoring in Finance & Credit. He is a CFA Charterholder.
Areas under his management include finances, human resources, and management of property and procurement for the National Bank of Ukraine.
Roman Borysenko has worked in Ukraine’s banking system for more than 16 years. From 2001 to 2014, he worked at Raiffeisen Bank Aval PJSC, starting his career as an economist and advancing to the position of deputy director and then director of the Human Resources Department.
He graduated from the Ukrainian Academy of Banking of the National Bank of Ukraine in Sumy with a major in Banking.