The National Bank of Ukraine (NBU) established requirements for ensuring the sustainability of banks, which underwent stress testing as part of the annual stability assessment in 2018, the regulator’s press office reported.
So, if the lack of capital is found after the sustainability assessment, taking into account the results of stress testing as per the basic scenario, the banks will need to develop some capitalization program.
"The corresponding program should envisage the capital increase by the amount that is defined as the maximum out of two values: the amount, established by the first two stages of sustainability assessment (asset quality assessment and extrapolation of the results of this assessment) and the projected amount, determined by the results of the third stage of the assessment - stress-test, conducted using NBU’s basic macroeconomic scenario for 2018”, the report said.
In addition, if the additional need in capital is found, based on the stress test results, as per the base scenario for 2019-2020 and as per the unfavorable macroeconomic scenario for 2018-2020, such a bank will need to develop and submit to the regulator a restructuring plan that it will need to fulfill until late 2019.
"The relevant plan should be based on the maximum amounts of need in capital, projected as per results of the assessment for each of the above scenarios," – NBU notes.
The bank makes a restructuring plan until 2019, taking into account the capitalization program for 2018. The measures, envisaged in the restructuring plan, should ensure that the bank observes the limits set by the central bank for the sufficiency of authorized capital (H2) and/or capital adequacy ratio (H3) throughout the forecast period.
These requirements were approved by the NBU Board resolution on the peculiarities of implementing the assessment of stability of banks and the banking system of Ukraine in 2018 No. 94 of August 14, 2018. The document comes into force on August 16, 2018.
Previously, NBU Deputy Governor Catherine Rozhkova said that the regulator is finalizing the strategy of macro-prudential policy and intends to submit a document to the banking community in the fall. The main task of the relevant regulation is to monitor the accumulation of systemic problems. After the implementation of this document, the NBU, in addition to the business plan, intends to demand from banks a so-called "recovery plan".
