Banks’ profit in January increased by 14%, analysts explained why.

In January 2024, Ukrainian banks produced ₴16.7B in net profit, ₴2.068B or 14% more than in January 2023. Net profit increased despite the increase in the tax rate: In January 2023, banks paid 18% tax, but beginning January 1, the tax rate increased to 25%.

Banks increased their tax contributions from ₴2.275B to ₴3.698B but still received higher net profits. This happened because revenues grew faster (+9%) than the banks’ expenses (+6%). Interest income, which is ₴68.8% of all income, increased by 22%. Interest expenses increased more (+37%), occupying 39.2% of the cost structure.

While some banks increased deductions to reserves for non-performing loans, others liquidated reserves. In general, there was a net liquidation of ₴1.253B, which increased profitability.