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12.02.2009
Credit-Rating: NBU to ease control over the banks
The National Bank of Ukraine (NBU) has adopted a resolution #49 named Certain Issues Regarding Banks' Activities, under which the regulatory requirements to banking institutions are loosened.
In Credit-Ratings view, the resolution may allow the banks to avoid violations of certain NBUs standards (i.e. capital adequacy, lending to insiders, and large loans) under depreciating national currency and gives more space for banks' additional capitalization at the expense of other capital's constituents. The adoption of this resolution will also enable the banks to avoid loss under deteriorated quality of their loan portfolios due to lowered requirements to reserves for asset operations.
Thereat, the regulators weakened control over quality of loan portfolios will allow certain banks to longer conceal problems with the asset quality due to prolongation of bad loans. Thus, such regulator's actions may be seen as partial shift of responsibility to banks owners and management, as well as NBUs attempt to evade its urgent emergency interference (introduction of temporary administrations) in banks activities. However, Credit-Rating anticipates the regulator to take more concrete actions aimed at stabilization in banks' activities.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
Denis Rudenko
DRudenko@credit-rating.ua
