Ukrainian banks continued to earn strong profits in the first eight months of 2023, recording a profit of UAH 95.1bn ($2.5bn), according to National Bank of Ukraine (NBU) data, NV reported on September 27.

This figure was a whopping 11.3 times higher than the earnings for the same period in 2022, which amounted to UAH 8.4bn ($226mn). (cumulative chart).

On a month-on-month basis the rate of earnings growth slowed somewhat to UAH11,922mn in August from UAH15,530mn, in July, the best result this year. (monthly chart)

The strong performance represents an all-time high in Ukrainian banking history according to the NBU. Prior to this, the highest net profit for the first eight months of a year was seen in the pre-war year of 2021, with UAH45.6bn ($1.2bn), surpassing the figures of UAH 32.6bn ($878mn) in 2020, and UAH 44.3bn ($1.2bn) in 2019.

The slow down month-on-month in August was the fifth-highest monthly figure for the year in terms of profit.

The net interest income of Ukrainian banks for the first eight months of 2023 reached UAH 129.3bn, a notable increase of 40.8% compared to the same period in the previous year. Additionally, net commission income amounted to UAH 33.4bn ($900mn), marking a 14.1% rise.

When compared to July, net interest income increased by only 1%, reaching UAH 17.91bn ($482mn), while net commission income grew by 2.1%, totalling UAH 3.92bn ($106mn).

The decrease in profits in August can be attributed to several factors, including a 5.3-fold increase in provisions, reaching UAH 1.62bn ($44mn), a 24.2% rise in other operating expenses, totalling UAH 1.47bn ($40mn), and a 37.8% increase in income tax, amounting to UAH 2.65bn ($71mn).

In total, banking reserve contributions for the first eight months of 2023 amounted to UAH 6.5bn ($175mn), whereas during the same period in the previous year they were at UAH 89.4bn ($2.4bn).