FXStreet (Mumbai) – The outlook for the Ukrainian banking system has remained negative for the sixth successive year, as the country faces a very serious economic, financial and political crisis, ratings agency Moody’s said in a recent report.
Moody’s Assistant Vice President noted in a report, “Ukraine continues to face a very serious economic, financial and political crisis. The highly stressed operating environment will continue to cause deep erosion in banks’ asset quality and capital buffers, and system-wide problem loans could rise to as much as 60% of gross credit exposure from 45% at the end of 1 April 2015.”
“Our scenario analysis indicates that banks would need to create additional loan-loss provisions of 15% of gross loans, on top of already existing loan loss provisions, in order to fully cover expected losses. If applied, incremental provisioning would result in a negative capital adequacy ratio for the banking system,” according to the report.
(Market News Provided by FXstreet)