National Bank of Ukraine Report: Despite Profit Decline, Loan Activities Boost Banking Sector Performance

Chas Pravdy - 19 August 2025 17:44

As of the first half of 2024, Ukrainian financial institutions, including commercial banks, have experienced a slight decrease in net profits compared to the same period last year.

Overall, profitable banks managed to generate approximately 78 billion hryvnias, which is a 1.1% reduction from the first half of 2023.

In the second quarter alone, this figure was around 38.6 billion hryvnias, 2.1% lower than the previous quarter and 1.1% less than the same quarter a year earlier.

A key driver of profitability has been the increased activity in lending.

Since the beginning of the year, the net interest margin has risen to 7.5%, while income from interest operations increased by 14.2% year-over-year.

However, rising expenses within the banking sector have led to a deterioration in the operational expense-to-income ratio (CIR), which now stands at 40.1%, compared to 36.5% a year ago.

According to the regulator, nearly half of the second quarter’s profits were generated by PrivatBank, which continues to hold a leading position in revenue generation.

An important factor has been the growing demand for hryvnia loans to businesses and households, which has significantly increased their cost.

Bank commission income for the first half of the year grew by almost 11%, driven by payment transactions and revaluation of government bonds.

By mid-year, the banking sector successfully met the regulatory capital requirement of 10%, with only one small bank violating the capital adequacy norm, indicating the sector’s stable condition and competitive strength.

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