© Reuters. FILE PHOTO: A general view shows the headquarters of the National Bank of Ukraine in Kiev, Ukraine April 18, 2019. REUTERS/Valentyn Ogirenko
KYIV (Reuters) – Ukraine’s banking system posted a net loss of 7.4 billion hryvnias ($253 million) in January-April, a rise from 0.16 billion hryvnias in January-March, as Russia pressed on with its military offensive, central bank data showed on Tuesday.
In April, banks had to transfer an additional 11.2 billion hryvnias of their earnings to reserves to cover possible future losses linked to the war. In March, banks transferred to reserves almost 15.8 billion hryvnias.
Russia’s invasion on Feb. 24 has harmed business activities, prevented many companies and individuals from servicing their loans and led to the banking system’s first losses since 2017.
The central bank said the return on assets ratio of the banking system – an indicator of profitability – had worsened to minus 1.11% as of end-April from minus 0.03% as of end-March.
The central bank has said the war could cause Ukraine’s economy to contract by at least one-third in 2022 and drive up inflation to over 20%.
($1 = 29.2500 hryvnias)