Ukrainians now can safely entrust their money to banks without fear of losing them, be sure the leadership of the NBU. They believe that today almost all unreliable and suspicious banks liquidated — these are the results of three years activities of the regulator for cleaning the market. However, finanalytica differed in assessing cleaning: some say that halving the number of banks will benefit the country, while others see bankopada undermining confidence in the national banking system.
As reported in the press service of the national Bank, for the years 2014-2017 withdrawn from the market 87 troubled banks (in 2014 in Ukraine there were 180 banks), which was concentrated in 30% of the total assets. We will remind, by assets, in particular equity capital, securities and deposits. For clarification of the NBU, withdrawn from the market primarily pseudorange: engaged in cashing in of money, in the pursuit of profit Finance riskier business projects and burned during the crisis, banks and financial pyramids and other disadvantaged.
«Now, investors can be sure that their money be returned on time and in full, work will start lending to small and medium businesses, the cost of (interest on) loans will be reduced, resistance of banks to macroeconomic shocks (crises) will increase; finally, became known the real owners of banks», — stressed the head of the NBU Valeria Gontareva.
Economist Ivan Nikitchenko noted that «bankopad» of recent years is directly linked to the crisis of 2014-2015.
«In those years, decreased quality (probability of repayment) of the loan portfolio, the customers started worse to pay the loans, many have ceased to serve them — analyzes Nikitchenko. All this led to the fact that the owners of the banks were obliged to deduct up to 100% of the loan amount in reserves of the NBU to mitigate risks. As a result, many banks became unprofitable, some of the shareholders have not found or did not want to pour money into banks, so they withdrew from the market».
Independent finanalitik Igor Shevchenko, on the contrary, says that the national Bank overzealous with the cleaning.
«After so many bankruptcies, people are just afraid to trust money to banks — there is a loss of confidence in the banking system. The more that commercial banks with Ukrainian private capital remained only 2.5%, more than 40% — subsidiaries of banks with foreign capital, who seek to escape from our market, but I can’t, because there is no buyer. And 55% after the nationalization of the Banking state-owned banks», — said Shevchenko.
Experts agree that smaller banks will continue to withdraw from the market, but gradually — for the year no more than ten. This is indirectly confirmed by Deputy head of the NBU Ekaterina Rozhkova, saying that identified five distressed banks, which may be eliminated.
«How many banks will remain, it is impossible to clearly answer — the market will determine. In the neighboring European countries of their 50-80, Ukraine almost came to this figure. Therefore, people should still have deposits up to UAH 200 thousand in one Bank, choosing the state, the major structure or with foreign investors,» advises Nikitchenko.
And economist Alexander Okhrimenko predicts a decrease in interest on deposits by 2-3% (below 15%) because of the state monopoly on Finance and absence of large lending caused by the crisis in the economy.
«The national Bank destroyed the competition. In Germany, for example, about thousands of banks, most of them are small, working within one or more villages and tough competition. We will not» — testroot Okhrimenko Christina Konovalov and Alexander Panchenko in the article «Three years bankopada: results and forecasts to 2017» in the newspaper «Today».
The Verkhovna Rada Committee on financial policy and banking is one of the most productive in the current Parliament. «Bankopad», «exchange rate swings» of the hryvnia, the nationalization of PrivatBank touched almost every citizen of the country. The reaction of the National Bank and the government to these challenges is not always caused by General public. The Committee took on the role of constructive criticism, forming, among other things, an alternative agenda for the banking sector.
With the head of the Committee Sergey Fishing journalists of the newspaper «the Day» spoke about the key tasks, which were solved his team in 2016, and plans for next year.
About strategy of development of Bank sector till 2020: «If you want to succeed you have to have a strategy. What steps need to be taken in order to avoid losses, to earn a profit to protect the staff, not to lag behind technological advances — all that the entrepreneur needs to calculate in order to be successful. States this applies to a much greater extent, because we are talking about the future of many generations. For 25 years, we are talking about the fact that Ukraine is a resource-based economy, but do nothing to change that.
That is why we decided to start «from his garden». For example, the financial system show the importance of setting goals for all governments.
If to speak very briefly, we want to turn banking sector face to the real economy, to the needs of business, industry and the needs of the ordinary citizen who works in these enterprises, receives a stipend or salary from the taxes of these companies. We offer what we did of economic «tigers». No investment in high-tech production and the wealth of the country. Is that we sell the world cheap raw materials and buying expensive goods, and are the reasons of the depth of all our crises. And causes of our falls of the hryvnia. We therefore have a duty to subordinate financial sector reforms, first and foremost, the banking system, and monetary policy long-term objectives of economic growth and changes in the structure of the economy. And it is very important to connect the strategy of the NBU and other regulators with a long-term strategy of the government.
We believe that sector reforms should take place in several ways.
The first — increase of responsibility of the national Bank for control of financial institutions, for withdrawing them from the market. The system should save the banks, not to destroy. Should finally finish the so-called «cleaning» that many respected experts have called the large-scale reallocation of ownership. Yes, a number of «schematic» of banks had to close. But the rest? When closing a healthy Bank in one questionable operation, which is not even proven in court, then taken the property for millions and billions of hryvnia from the owner of the Bank. Yes, he could be guilty of something. But forever take away the means of thousands of businesses out there that have had their accounts or deposits. And this is a massive blow to the future of the economy. Worldwide, the most important thing for government is to save depositors ‘ funds. Therein lies the trust. This is the basis of the inflow of money into the system, and hence resources for lending to economic growth.
Another important issue is the reorientation of monetary policy to stimulate growth. Today, the national Bank focused only on inflation, moving the economy to a fiscal starvation. NBU only sucks due to banks due to the high rates on certificates of Deposit. Banks do not need to strain to look for a viable business to lend to. This limits the investment activity, did not stimulate the creation of new jobs. In the end, hampers the exit from the crisis. And it would be possible to send money to logistics, energy infrastructure, promising high-tech production.
But we could introduce monetary tools to stimulate growth by the NBU and the government need to build infrastructure. This money came not in the foreign exchange market and through banks directly into the industry on important investment projects.
The building of this infrastructure lies the goal of the third direction of reforms. We need to create a series of institutions for promoting growth. Development Bank to export credit agencies. Such institutions operate in most countries of the world.
Preferential loans for small and medium-sized businesses, support of infrastructure projects — all of which should create conditions for domestic demand, for rocking the flywheel of the economy. And most importantly — cheap loans need to only projects with a sufficient level of technology and added value. The development of own technologies should gradually become more profitable than selling abroad the raw metal, roundwood or primitive fertilizers. Only then will we be able to break out of poverty.
Independence does not mean lack of control»: a Simple example. Employees of the national Bank are not civil servants. This means that they do not pass a special inspection upon appointment, they are not subject to state tariff scale of wages, they do not declare properly his property. In addition, the NBU does not check the Ministry of justice, and the court can not accept documents of the Central Bank invalid or violates the law. Now no one at all, except for the President, can not affect the national Bank, even if it is openly harmful policy. There is no procedure of preschedule resignation of the leadership of the NBU. Who can explain the reason for the closure of a Bank? It was done right or it is banal seizure of property? Even the experts do not know the true state of Affairs. In all developed countries, Central banks are accountable to the parliaments. Their leaders are usually quarterly report of parliamentary committees. After the «fall» of any Bank reports are published many hundreds of pages of detailed description of the reasons for all actions and decisions of the authorities in his salvation. We even MPs do not have the opportunity to learn the truth. We intend to change this situation and has submitted to Parliament a package of bills. However, we do not increase the influence of the Verkhovna Rada. We only prescribe mechanisms for the implementation of constitutional authority part of the national Bank of the NBU Council is to control the activities of the Board.
The independence of the national Bank need this. It should not under pressure to print money and to close holes in the state budget. But the Bank is obliged daily to cooperate with the government and Parliament for reform of the financial system and the achievement of key growth objectives. View: the fed in the U.S. is constantly communicating with the Finance Minister, the head of the Central Bank of Japan is in constant contact with the government and the Japanese Parliament. I’ve been told, for example, the former head of Bank of Japan Masaaki Shirakawa, said Fishing. According to him, reduction in price lending for economic development — the overall objective of the Central Bank and the government.
About Valeria Gontareva: Our Committee back in the fall appealed to the President that he has submitted to the Verkhovna Rada representation about resignation of the head of the NBU. However, the reaction is still there. We continue to believe that today there is every reason for the change of the head of the Central Bank. Our strategy is there a legitimate professional criticism of the work of the NBU with numbers and charts on dozens of pages. Someone must be responsible for large-scale foreign exchange speculation and uncontrolled introduction of funds from banks, and very suspicious selectivity when closing banks. But we are not a law enforcement Agency. The results of the investigation must show the Prosecutor’s office and NAB.
It is important for us to change the policy of the National Bank. To see our deals, offers dozens of experts were taken into account, there was a wide professional discussion. And all relevant Committee is always ready to dialogue. But all our calls go unanswered. The decision to ask the President about the resignation of the head of the NBU has gradually matured. Today, it is the opinion of the majority members of the Committee from all key factions of the Parliament.
About «bankopada»: Especially for our Committee one of the scientific institutes prepares its analysis of the situation in the banking system at year-end. But we can say that the so-called «cleansing» have not yielded the desired results. Bank losses at the end of last year, according to preliminary estimates, amounted to more than 160 billion UAH. It is clear that the lion’s share falls on Privat. But in a number of other banks the situation is complicated.
The level of problem loans is not reduced. Return of funds of population and business in the banking system is minimal. This means that the Bank have a systemic change approach to work. Of course, we will continue to «push» the adoption in Parliament of our laws on the protection of the rights of creditors and consumers of financial services, the stimulation of lending, on the simplification of Bank merger and many others. Their implementation will yield results. But without a fundamental change in the policy of the NBU and the government is not enough.
«Unfortunately,we can expect further devaluation of the hryvnia»: unfortunately, we see that we can expect further devaluation of the hryvnia. For the commodity economy, which is Ukraine, this is a common phenomenon: the cheaper national currency, the more you can sell our raw materials to foreign markets. A moderate depreciation of the hryvnia and inflation allows the government to obtain large revenue. But with a sharp drop in the price of raw materials in the world, this means an increase in domestic prices and the impoverishment of our population. And it absolutely does not stimulate the development of the new economy, built around increasing the added value. A ton of iPhones brings 70-100 thousand times more income than a ton of ore. But requires more effort, more changes, more reforms. This is no.
Without reforms and stimulate lending growth, we do not see. So — to meet the increasing social obligations to the public sector will be possible only at the expense of inflation and devaluation, and new loans from the IMF. In addition, the devaluation of the favorable exchange speculators, which are now uncontrolled (or controlled?) authorities. The IMF, in turn, desired net reserves, that is, requires that the national Bank was buying foreign currency on the market, and were not constrained by policy interventions, covering temporary deficits. It depletes the economy. The government has no understanding — either as to improve the lives of ordinary Ukrainians or how to develop its own production. And it’s sad.
But we will continue to offer the authorities our expertise, based on world experience and serious work of many experts. We owe step by step to change our country for the better», writes Vladimir Briefly in the article «Financial «storm»: what was and what will be?» in the newspaper «Day».
9 Feb. Press review. Ukrainian bankopad: do not bend the stick? 09.02.2017