NON-PERFORMING LOANS OF UKRAINIAN BANKS UNDER MARTIAL LAW CONDITIONS

Abstract

The article is devoted to the study of problem loan debt of Ukrainian banks at the current stage of financial market development and identifying the factors that caused its growth. It is noted that the war negatively affects the country's economy and financial market, worsening the performance of banks, in particular increasing the share of problem loans. The essence of the concept of "problem loan" is considered according to various definitions from domestic and foreign sources, as well as regulatory acts. The article analyzes the credit market of Ukraine during 2020-2023. Particular importance was given to the study of lending market problems that arose due to the protracted military actions in Ukraine and caused a new economic and financial crisis. Objective factors that worsened the quality of bank loan portfolios and the creditworthiness of borrowers who took out loans in recent years were identified. The dynamics of the share of non-performing loans in the loan portfolio of Ukrainian banks in general and in terms of state-owned, private and foreign-owned banks is analyzed. The level of non-performing loans of the ten largest domestic banks by loan portfolio size was also studied. The article outlines the instruments banks use to reduce the level of problem debt in both the corporate and household loan portfolios. Based on the analysis, a set of measures to reduce problem debt is proposed: loan restructuring, writing off bad debts, sale of problem loans, strengthening debt collection efforts, refinancing through government programs, forming adequate reserves for problem loans, pre-trial dispute resolution. Despite the efforts of banks, the share of non-performing loans remains high due to the negative impact of the war. At the same time, banks effectively manage problem debt and are willing to take moderate credit risks. The importance of timely identification of problem loans to minimize bank losses is emphasized.