NBU ready to extend recapitalization for small banks

The banks that have not undergone stress testing will complete diagnostic testing according to resolution No. 351 on credit risks, and the National Bank of Ukraine (NBU) will extend recapitalization for such banks if their capital is negative.

NBU Financial Stability Department Director Vitalii Vavryshchuk has stated this in an interview with Financial Club information agency.

“We will provide a transitional period for the banks that have not undergone stress testing if their regulatory capital goes negative based on new regulations. Small banks will undergo diagnostic testing in accordance with resolution No. 351. All banks will have about three years to conduct recapitalization, although their schedules may differ,” Vavryshchuk said.

A reminder that the resolution on credit risks has been in effect in test mode since September, and the National Bank has already seen the banks' provisional estimates regarding the resolution's impact on their regulatory capital. The repayment risk has been estimated at UAH 497 billion, which is just UAH 23 billion higher than the repayment risk under stress testing.

mk