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NBU updates requirements for credit risk calculation: what will change for banks

The National Bank of Ukraine has revised the rules on how banks should weight their lending operations to better account for risks and enhance the resilience of the financial system. In particular, the requirements for calculating the minimum amount of exposure weighted by credit risk have been updated. This was reported by the press service of the regulator, Komersant ukrainskyi informs

The National Bank of Ukraine continues to harmonize its regulatory framework with European standards. on April 3, 2025, the NBU Board approved a new Regulation on determining the minimum amount of credit risk-weighted exposures, which will come into force on April 9, 2025 (Resolution No. 43).

These changes are an important step in the modernization of banking supervision, as they allow for a more accurate assessment of unexpected losses of banks and ensure that these risks are adequately covered by capital.

What are credit-weighted exposures?

Credit risk-weighted exposures are a measure that reflects potential unexpected losses from credit risk on active banking operations (e.g., loans). These losses must be covered by banks’ own capital to ensure financial stability. Until now, the calculation was based on the outdated approaches of the Basel Committee, but the NBU’s new requirements bring it closer to modern international standards.

“Currently, banks already take credit risk-weighted exposures into account in the minimum capital adequacy requirements set out in the Instruction on the Procedure for Regulating Banking Activities in Ukraine. However, their calculation is based on the previous approaches of the Basel Committee on Banking Supervision,” the NBU said in a statement.

Key changes in the requirements

The update includes three main innovations:

1. Expansion of the list of rated exposures: risk weights for certain transactions will now be determined based on credit ratings, which makes the assessment more accurate.
2. Reduced risk weights: lower weights will be applied to exposures to small and medium-sized businesses (SMEs) and loans secured by residential real estate. This will stimulate mortgage lending and support for SMEs.
3. More risk mitigation instruments: The list of eligible instruments (e.g., guarantees or collateral) and providers of such instruments has been expanded, which will help banks manage risks more effectively.

These changes will allow for a more accurate assessment of potential losses, increasing the resilience of the banking system, and will also contribute to the development of key sectors of the economy.

How will this affect banks and the economy?

• For banks: the updated approach will make credit risk assessment more sensitive to the actual state of assets, which will help avoid underestimating losses and strengthen financial stability.
• For businesses and households: lower risk weights for SMEs and mortgages may lead to increased availability of loans. Banks will have an incentive to lend more actively to small businesses and issue mortgages, which will revive the economy.

Thus, the NBU’s new requirements not only harmonize regulation with EU standards but also create conditions for economic growth in Ukraine.

Phased implementation: schedule of changes

The transition to the updated rules will be gradual:

1. Until March 1, 2026: banks must develop or revise internal regulations for calculating credit risk-weighted exposures.
2. From March 1 to August 1, 2026: a test period will be held, when banks will make calculations under the new approach in parallel.
3. From August 1, 2026: all banks will officially switch to the updated calculation of capital adequacy requirements.

This timetable gives banks enough time to adapt to the new standards without any sudden shocks.

Why is this important for Ukraine?

Updating the requirements for calculating credit risk is a step towards the integration of the Ukrainian banking system into the European financial space. It is in line with Basel III standards and EU directives, which increases the confidence of international investors in Ukrainian banks. In addition, stimulating mortgage lending and support for SMEs can become a driver of economic recovery, especially in the post-war reconstruction.

What do banks and clients need to know?

• For banks: as early as April 9, 2025, when Resolution No. 43 comes into force, it is worth starting to prepare for the changes. Developing internal documents and testing new calculations will be key tasks for the coming years.
• For clients: if you are planning to take out a mortgage or business loan, the new rules may make these products more affordable after 2026 due to reduced risk weights.

The NBU encourages banks to actively prepare for the transition to ensure smooth operations and compliance with international standards.