NBU announces stress tests for banks: assessment will include 3 stages
26 November 2024 05:14
In 2025, after a four-year break, the assessment of the stability of banks and the banking system of Ukraine will be carried out according to a standard procedure. This was reported by the press service of the National Bank of Ukraine, "Komersant Ukrainian" reports
The test should cover more than 90% of banks’ net assets and will determine the need for capitalization or restructuring of individual institutions.
“After a four-year break, the assessment of the stability of banks and the banking system will be carried out according to a standard procedure, with the involvement of external auditors in assessing asset quality and the use of an unfavorable scenario as part of stress testing,” the NBU said.
The assessment will include three key stages:
- verification of asset quality by independent auditors,
- extrapolation of the results,
- stress testing of the largest banks under baseline and adverse scenarios.
The third stage will cover the banks with the highest levels of retail deposits, risk-weighted assets, and retail loans, as well as those that needed capitalization based on the results of the 2023 resilience assessment. This will cover more than 90% of the banking system’s net assets.
The resilience assessment will be carried out as of January 1, 2025. According to the schedule, in December 2024, the NBU will approve the terms of reference and determine the list of banks to be stressed tested.
By the end of April 2025, the auditors will complete the asset quality review, and by August 10, the NBU will approve the assessment results. If necessary, the NBU will send requirements to banks to prepare capitalization or restructuring programs.
