OREANDA-NEWS. June 15, 2010. Ukrainian president signed into law the draft that obliges the NBU to revise provisions formation rules. Currently, banks have to make provisions against FX loans to those corporate customers who do not earn FX-denominated revenues, at 50%-100% of the amount of such loans. The new law brings the provision level down to 3% only.

Concorde Capital: banks are not yet allowed to lend in foreign exchange to retail customers. The new law will create more opportunities for banks to profit as FX loans are cheaper and more attractive to customers (providing stable exchange rate) thanks to cheaper and more stable bank financing in foreign currency. That said, we expect it will take some time for banks to re-start lending in FX due to still high NPLs level (~25%) and more cautious approach to credit risks amid remaining high economic uncertainties.