The Factors of Credit Portfolio Recovery and Resumption of Bank Crediting in Ukraine

Abstract

The purpose of the article is to investigate the main factors influencing the structure of the credit portfolio, and define measures aimed at optimizing and restoring the credit activity of Ukrainian banks. The main problems standing in the way of an intensification of bank crediting are determined: high proportion of troubled credit indebtedness; unsatisfactory structure of bank liabilities, which is the main source of credit resources; slow rates of banks capitalization recovery; low demand for credit from borrowers due to high interest rates; variable dynamics of the development of basic economic sectors; weighty share of the shadow sector of the economy, which cuts off the credit service for a part of clients; presence of other instruments of the low-risk placement of credit resources. A number of measures for the recovery of the credit portfolio (reduction of crediting risks, creation of the State-controlled agency for hopeless credits) are proposed within the terms of solving these problems; structure of assets and liabilities (decrease of dollarization of assets and liabilities, differentiation of the norms of reservation of attracted funds, restoration of trust in banks, more equitable distribution of credits between regions); restoration of bank capitalization (restoration of the requirements on the buffer of reserve of capital, harmonization of capital ratios in accordance with Basel III, development of the Conception of growth of capitalization of banks by attracting foreign investment); reduction of the value of credit resources (additional decrease in bank rate, amendments to the State program «Accessible credits 5–7–9%»); stimulation of development of basic branches of economy (finalization of negotiations with the EU on increasing of quotas size, creation of regional support centers for exporters); de-shadowing of the economy (growth in financial inclusion, development of the Conception of transferring transactions into non-cash form, transferring recipients of social payments to a cashless form of payment, increasing the transparency of transactions); reorientation of bank crediting the budget deficit towards bank crediting legal entities and individuals (minimizing the budget deficit, introducing a new standard that will regulate the share of the bank’s assets in OVDPs.

Keywords

• сredit
• capital
• assets
• liabilities
• currency
• npl
• domestic government credit bonds (ovdps)