The National Bank established requirements to ensure the sustainability of banks based on the results of the annual sustainability assessment in 2018

Information from the NBU that was published on the website (https://bank.gov.ua):

«The National Bank established requirements to ensure the stability of banks that underwent stress testing as part of the annual stability assessment in 2018.

First of all, in the event that a lack of capital is detected based on the results of the annual assessment of the stability of banks, taking into account the results of stress testing, according to the base scenario, banks will need to develop a recapitalization program. This program will provide for an increase in capital by the amount determined as the maximum of two values: the amount determined by the results of the first two stages of the sustainability assessment (asset quality assessment and the extrapolation of the results of this assessment) and the projected amount determined by the results of the third stage of the sustainability assessment (stress test ) according to the basic macroeconomic scenario for 2018 established by the National Bank.

Secondly, in the event that an additional need for the bank’s capital is identified based on the results of stress testing under the base scenario for 2019-2020 and the unfavorable macroeconomic scenario for 2018-2020, the bank must develop and submit to the National Bank a restructuring plan, which it should be completed by the end of 2019. This plan should be based on the maximum of the capital needs estimated from the results of the assessment under each of the above scenarios.

The bank is preparing a restructuring plan until 2019, taking into account the capitalization program for 2018. The measures provided for in the restructuring plan should ultimately ensure the bank’s compliance with the limit values of regulatory capital adequacy (adequacy) (H2) and/or core capital adequacy standard (H3) set by the National Bank over the entire forecast period.

Outlined requirements are approved by the resolution of the Board of the National Bank of Ukraine dated August 14, 2018 No. 94 «On the peculiarities of assessing the stability of banks and the banking system of Ukraine in 2018”, which enters into force on August 16, 2018.»

The information is from the website https://bank.gov.ua