Pivdenny Bank classified as a systemically important bank in Ukraine


The National Bank of Ukraine has included the Pivdenny Bank in the list of systemically important banks in accordance with the updated methodology, taking into account the recommendations of the European Supervisory Authority and international practices. The NBU Board of June 27, 2019 identified a total of 14 systemically important banks.

In accordance with the systemically important status, Pivdennyi Bank must meet increased requirements to provide additional margin of safety. At the same time, the status of a systemic bank does not in any way guarantee a bank special conditions to maintain liquidity during stressful periods – liquidity will be provided under general conditions to the entire banking system.

The National Bank has established special values for the instant liquidity ratio standard (at least 30%) and the maximum credit risk ratio per counterparty (not more than 20%) for the systemically important banks of Ukraine. In addition to the standard value of capital adequacy, banks must form a buffer of systemic importance ranging from 1% to 2%.

It is important to note that in the first quarter of 2019, Pivdenny Bank confidently fulfills all the NBU economic standards. Thus, both the regulatory capital adequacy ratio of H2 and the capital adequacy ratio of H3 (the ratio of regulatory capital to assets) show an adequate margin which allows the bank a solid base for further growth. The value of H2 on 01/04/2019 was 11.9% (minimum required is 10%). Standards of credit risk, characterizing the degree of concentration of lending of the bank, are also sustainably attained. This indicates a balanced policy of the bank for managing credit risk and low dependence on large borrowers. On 01/04/2019, the value of the H9 standard, which shows the ratio of insider debt to regulatory capital, was only 9.0% (with the maximum allowed at 25%).

With a substantial margin, liquidity indicators H4, H5 and H6 are being fulfilled, to which, starting with December 2018, a new standard for covering liquidity outflows of LCR was added, which indicates a high solvency of the bank. On 01/04/2019, the LCR value of Pivdenny Bank in all currencies was 122% (the required minimum is 80%).

Pivdenny Bank is a universal Ukrainian bank, founded in 1993, with its head office in Odessa. The Bank offers a wide range of services for business clients and individuals throughout Ukraine through a regional network, which by the end of December 2018 consisted of 95 branches in 18 regions of Ukraine. According to the results of 2018, the net profit of Pivdenny Bank amounted to UAH 274 million, which is over five times higher than last year.

A systemically important bank is a bank whose bankruptcy or improper functioning can lead to systemic risks. The National Bank pays special attention to the activities of systemically important institutions, because the potential difficulties in their work may have a negative impact on the operations of the entire financial system.