The national Bank of Ukraine (NBU) in 2018 imposes an annual assessment of Bank soundness.
As reported, the NBU on the web site, the corresponding Position on the implementation of the assessment of the stability of banks and the banking system of Ukraine approved by the NBU Board resolution No. 141, dated 22 December 2017.
According to the report, the evaluation will be carried out annually as at 1 January and will consist of three stages. First – check by audit firms included in the Register of audit firms, the Bank’s asset quality and the adequacy of collateral for credit operations. The second extrapolation of the results of the first stage and assessment of capital adequacy of the Bank as at the valuation date. Third – NBU capital adequacy on the results of the stress test in the baseline and adverse macroeconomic scenarios for the three-year forecast horizon.
The first and second stages of evaluation will take place all solvent banks . The list of banks for the third phase will determine the NBU. It will take into account the impact of each Bank on the stability of the banking system.
The first phase of the evaluation will carry out an independent audit firm within annual audit, the annual financial statements, consolidated financial statements and other information about financial and economic activities. The second and third stages of the sustainability appraisal, which will be implemented by extrapolation of the results of the first phase and stress testing will be conducted by the NBU.
According to the report, the stress test will be conducted in the baseline and adverse macroeconomic scenarios by applying the developed controller models.
“If the Bank in the second or third stage of stability evaluation values of capital adequacy ratios will be lower than that set by the NBU, there is a need for additional capitalization. Banks, in respect of which is found the capital requirement will be required to develop a program of capitalization and / or action plan to maintain or restore capital levels”, the report said.
The results of the sustainability appraisal will be published on the website of the NBU before the end of the relevant year.
“The introduction of such a tool as the annual assessment of sustainability, will reveal not only the current but also future risks of banks. This will allow banks to generate capital sufficient to compensate for future risks that will contribute to improving the stability of the banking system and protection of interests of depositors and creditors of banks”, the report said.