NBU to resume 3-stage assessment of Ukrainian banks after 4-year hiatus

MOSCOW. Nov 26 (Interfax) - The National Bank of Ukraine (NBU) will reinstate its full-fledged three-stage assessment of the banking system's resilience in 2025 for the first time since the start of the crisis, Ukrainian media said, citing a statement published on the NBU website.

"The adaptation of banks to operating in conditions of crisis and their quite high financial results make it possible to return to the usual annual assessment practice. Ultimately, this exercise should reveal possible weak links and, if necessary, strengthen them to enable the banking system to continue to successful respond to current and potential challenges," NBU Governor Andrei Pyshny was quoted by the statement as saying.

The banking system resilience assessment will include three stages starting from next year, such as a mandatory asset quality review (AQR) by independent auditors, the NBU's extrapolation of in-depth AQR results for all banks whose assets were subject to such a review, as well as stress testing by the regulator of the largest banks under the baseline and adverse scenarios based on the institutions' financial statements with a forecast horizon of three years.

At the same time, under the published concept for assessing banks' resilience in 2025, the NBU has eased the preconditions for conducting an in-depth review. Whereas in 2021 a financial institution was to commit seven errors while managing assets of individuals and entities to prompt such a review, the rules for 2025 say that an in-depth review will be conducted if four of such errors result in adjusting credit risks.

In December, the NBU plans to endorse the terms of reference for resilience assessments and the list of banks to undergo stress tests. The NBU is expected to complete the first stage of the assessment in April 2025, the second stage on July 10, and the third one on August 10.

According to the schedule published by the NBU, banks will have to publish asset quality assessment results in their reports on August 1, 2025 and submit the second-stage and third-stage programs to the NBU on August 15 and September 15, respectively.

The country's banks will be given until the end of next year to implement the NBU's programs and to publish their resilience assessment results.