The National Bank of Ukraine (NBU) has introduced requirements to ensure resilience of the banks following their stress testing as part of the annual resilience assessment in 2018, according to a report on the central bank’s website.
“First, in the event of capital shortage according to findings of the annual resilience assessment of the banks including the results of the stress testing under the baseline scenario, the banks are required to develop a recapitalization program. This program is expected to envisage an increase in capital at amount being either greater of two values: the sum estimated based on the results of the first two stages of the resilience assessment (quality assessment of assets and extrapolation of the assessment results) and the forecast amount derived from the results of the third stage of the resilience assessment (stress testing) under the macroeconomic scenario set by the NBU for 2018,” the report reads.
“Second, in the event of any capital needs found following the results of the stress testing under the baseline scenario for 2019-2020 and under the adverse macroeconomic scenario for 2018-2019, the banks are expected to develop and submit to the NBU their restructuring plans to be implemented till the end of 2019. These plans are expected to be based on the highest amount of the capital need that arise following the results of each aforesaid scenario,” the NBU said.
“The banks are expected to develop restructuring plans before 2019 taking the capitalization program for 2018 into account. As a result, the measures laid out in the restructuring plans should be aimed at ensuring the banks’ compliance with instant liquidity ratio limits for adequate regulatory capital (H2) and/or adequacy ratio for core capital (H3) over the entire forecast period set by the NBU,” NBU experts added.
“The above requirements are approved by NBU board resolution No. 94 on specifics of assessing resilience of banks and the banking system of Ukraine in 2018 that enters into force on August 16, 2018,” according to the document.
