Moody’s saw the improvement of the Ukrainian banking system

The level of problem loans in Ukraine will be reduced to 50% by the end of 2018.

International rating Agency Moody’s believes that the banking system of Ukraine is almost out of a state of insolvency.

This was announced by Director of the banking group of Moody’s Yaroslav Sovgira.

Moody’s expects the level of problem loans in Ukraine (minus PrivatBank) will be reduced to 50% until the end of 2018.

“We expect that the level of NPLs in the banking system of Ukraine will decline due to restructuring, debt relief, due to the fact that the economy is growing, interest rates decrease, there is moderate growth of the loan portfolio. But now the level of bad loans in Ukraine is the highest in the CIS and Eastern Europe. In order for troubled debt reached acceptable level, you need a few years”, – said Sovgira.

In his opinion, the banking sector will be back this year to break-even at the expense of reduction of deductions in reserves.

Sovgira said that the level of capitalization of the banking system will remain stable in the years 2017-2018.

Moody’s believes that the main challenge for Ukraine is the reform of state-owned banks and restructuring of bad loans.

According to the Agency, for those borrowers who at least pay the interest on loans to offer the credit debt restructuring.

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