In the first nine months of 2024, solvent banks of Ukraine received a record net profit of 118 billion hryvnias. This was reported by the press service of the National Bank of Ukraine (NBU). Only in September, the net profit of banks increased by 12 billion hryvnias, which indicates a steady improvement of financial indicators in the banking sector.

The main reason for the increase in profitability remains the high net interest margin, which is supported by the increase in the volume of lending and investments of banks in domestic government bonds (OVDP). According to the NBU, the average yield on loans and the portfolio of government bonds stabilized in the third quarter of 2024, while the volume of such instruments continued to grow.

The total volume of the gross hryvnia loan portfolio provided to clients increased by 14.5% since the beginning of the year, and the net loan portfolio grew by 23.6%. The volume of investments in OVDP also increased by 21.1%, which provided banks with stable profits. At the same time, funding costs decreased slightly due to lower market deposit rates, which allowed banks to maintain a high level of net interest margins.

The NBU notes that only eight small banks out of 62 solvent banks ended the reporting period with losses. Their combined loss is 342 million hryvnias, and these are mostly institutions facing inefficient business models and long-term problems.

Positive financial results of banks also influenced the increase in tax revenues: in nine months of 2024, banks paid income tax in the amount of 35 billion hryvnias. At the same time, the return on capital in the banking sector during this period amounted to 45.8%, which is slightly lower compared to the previous year (56.9%).

However, the introduction of a possible 50 percent tax on bank profits in 2024 could reduce the return on capital to around 30 percent. This, as the NBU warns, may affect the ability of banks to accumulate capital to strengthen their financial stability and continue credit support to the economy.