During the second year of the war, banks increased their profits by 300%.

In 2023, solvent Ukrainian banks earned ₴86.5B in net profit.

“This is almost four times higher than the figure for 2022 and 12% higher than the results of 2021, before the full-scale invasion,” the NBU comments.

The regulator noted that the driving force behind the sector’s income growth remains the increase in interest income from highly liquid assets and lending.

“The main factor behind the significant difference in profitability, if compared with the previous year, was significantly smaller deductions from reserves for losses from active operations, which decreased by 86% over the year,” the NBU added.

Since the beginning of the war, banks have formed reserves of ₴133B, of which only ₴17B was added in 2023. In December 2023, according to changes to legislation, banks added the annual amount of income tax based on the results of 2023 at an increased 50% rate to their bottom lines.

The return on capital in the banking sector as of January 1, 2024, was 31.6%. A year ago, this figure was 9.7%.