From now on, banks will identify non-performing assets in accordance with the newly introduced amendments to the Regulation on the Organization of the Management Process for Problem Assets in Ukrainian Banks, which will take effect at the beginning of 2025.
This means that non-performing assets of a bank will include, in addition to those classified as default according to the prudential requirements of the Regulation on the Determination of Credit Risk by Banks in Ukraine, the following:
- acquired or created impaired financial assets;
- restructured assets for which, after ceasing their recognition as non-performing, the bank has conducted a repeated restructuring and/or for which there is a delay in debt repayment exceeding 30 calendar days.
The introduced changes are not expected to significantly impact the volume of non-performing loans in banks, given the cautious approaches of financial institutions to risk assessment and the good quality of the loan portfolio. At the same time, these innovations will align the statistics on non-performing loans with European standards, enhancing the transparency of the domestic financial sector.