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Public sector banks reduced their NPL portfolio by UAH 15 billion

In 2021, public sector banks continued their efforts to reduce non-performing loans. Thus, in the first half of the year, the portfolio of such loans decreased by 5%, or by UAH 15 billion, to UAH 295 billion, and their share in the loan portfolio of the banking sector decreased by 2.8 percentage points to 54.6%.

Write-off of problem assets from banks' balance sheets remains the main tool of NPL resolution. In January-June of the current year, public sector banks wrote-off over UAH 15 billion against formed provisions. Also, non-performing loans were restructured for almost UAH 9 billion, of which more than UAH 6 billion - in accordance with the Law of Ukraine "On Financial Restructuring".

By industry, the largest amount of non-performing loans issued by public sector banks has traditionally been concentrated in wholesale and retail trade, food production, metallurgy and in real estate related industries.

NPL resolution remains a major issue for both the banking system as a whole and state-owned banks. According the updated Strategic Principles of Reforming for the State Banking Sector (strategic framework), solving the NPL problem of public sector banks is one of the Government's priorities.

To address issues related to the reduction of problem loans, public sector banks have also been active in litigating debt collection.

As of July 1, 2021, there were more than 48,000 lawsuits filed by public sector banks in the amount of UAH 39 billion.

In the first half of 2021, more than 26,000 new lawsuits worth UAH 9 billion were filed, 48,000, court decisions worth more than UAH 8 billion were received, and 51,000 enforcement proceedings worth almost UAH 28 billion were opened.