The National Bank of Ukraine (NBU) will return to a full three-stage assessment of the banking system's resilience next year for the first time since the onset of the full-scale invasion, as reported on the regulator's website on Monday.
"The adaptation of banks to operate in the conditions of a full-scale war and their relatively high financial results allow us to return to the usual practice of annual assessments. Ultimately, this exercise should reveal any potential weak links and strengthen them if necessary, ensuring that the banking system can continue to effectively respond to existing and potential challenges," said NBU Chairman Andriy Pyshny in the press release.
Thus, the resilience assessment of the banking system in 2025 will consist of three stages: a mandatory asset quality review (AQR) for all banks conducted by independent auditors, extrapolation by the National Bank of the results of the in-depth asset review within the AQR for banks that underwent such a review, as well as stress testing of the largest banks by the regulator under baseline and adverse scenarios based on the financial reports of financial institutions with a three-year forecasting horizon.
Additionally, according to the published concept for the resilience assessment of banks in 2025, the central bank has softened the prerequisites for conducting an in-depth review: whereas in 2021 a financial institution was required to have seven asset management errors for legal entities and individuals, in 2025 only four of these errors must result in a credit risk adjustment to warrant an in-depth review.
The NBU informs that it plans to approve the Terms of Reference for the resilience assessment and the list of banks subject to stress testing in December of this year, complete the first stage of the assessment by April 2025, the second stage by July 10, and the third stage by August 10 of the following year.
According to the schedule released by the regulator, by August 1, 2025, banks must reflect the results of the asset quality assessment in their reports, and by August 15 and September 15, 2025, they are required to submit their programs for the second and third stages to the NBU, respectively.
It is expected that banks will implement the programs approved by the National Bank by the end of the next year, and the results of the resilience assessment will be published by the same time.