KYIV

Banks in Ukraine reported a net profit of $393.3 million in the first quarter of 2021, 32 percent less than in the same period last year when net profit was $577.3 million, the country’s central bank said.

In the fourth quarter of 2020 banks reported a net profit of $75.8 million, the central bank said. The last three months of the last year, when loan provisioning was higher than usual, showed the worst financial performance .

“The main impediments holding back  growth in the sector’s profitability in the first quarter were changes in the fair value of securities,” the National Bank of Ukraine said in a report.

The overall result of trading and revaluation transactions showed $184 million in losses, compared to $277.8 million profit in January-March 2020, the report showed.

Loan-loss provisions made by banks in the first three months of this year fell by 58.3 percent year-on-year to $72.2 million from $169.6 million in the same period in 2020.

Still, analysts said that while the coronavirus crisis worsened the financial standing of banks, it was not as bad as they had expected in the spring of 2020.

The central bank said that recovery in demand for banking services, amplified by a the lower cost of funding, had a positive effect on banks’ interest income.

Net interest income was up 21.9 percent year-on-year compared to 6.8 percent year-on-year a year ago.

The growth in cashless transactions fuelled an increase in net commission income by 15.1 percent year-on-year in the first quarter, up from 7.9 percent year-on-year in the same period of 2020. Net interest and commission income are currently sufficient to cover the administrative costs of most banks, the  central bank said.

As of 1 April 2021, 66 out of 73 solvent banks were profitable, with seven banks taking a total of $3.6 million in losses.

The sector’s profits became less concentrated as the five most profitable banks generated 57 percent of total profits compared to 83 percent in January-March 2020.

In 2020, banks in Ukraine reported a net profit of $1.5 billion, 29 percent less than in 2019, when the country’s banking sector earned $2.1 billion.

The number of loss-making banks did not increase. Last year, 65 in 73 solvent banks were profitable.