By KYIV. Dec 29 (Interfax-Ukraine) – Operations with commercial real estate and construction top the list of industries with the largest share of non-performing loans (NPL) – respectively 70.2% and 68%, the National Bank of Ukraine (NBU) said in the Financial Stability Report based on the analysis of the largest corporate borrowers as of December 1, which account for 60% of banks’ net loan portfolio.
According to the document, in general, in the sector of real estate operations, the share of NPL is 62.8%, only slightly more than in mechanical engineering – 62.5%, while the following sectors for the supply of electricity and other housing and communal services, as well as metallurgy, have significantly lower figures – respectively 46.8% and 45% (42.7% in green energy).
At the same time, the NBU said that in terms of the level of migration of loans to the NPL over the past year, the supply of electricity and metallurgy are in the top three – 41.7% (33.9% in green energy) and 43%, while in construction it is 54.4%.
In operations with real estate and mechanical engineering, the rate of migration of loans to NPL is lower – 33.6% and 28.9%, respectively, since the problem of their bad loans was even before the start of the war.
"Large-scale shelling of energy infrastructure exposes borrowers to significant losses. In addition to reducing production, they lead to deepening of existing logistical problems. As a result of interruptions in work and rising production costs, the solvency of enterprises in most industries will worsen. This effect will be most noticeable in the energy-intensive sectors of the mining, chemical and metallurgical industries which may temporarily suspend production. Due to violations of production cycles, from manufacturing or growing to storage of finished products, the food industry may suffer losses," the NBU said.
According to its calculations, the largest share of electricity costs in production costs in the extractive industry is from 20% to 40%, on average it is more than 10% in metallurgy and the chemical industry, about 5% or slightly higher in mechanical engineering, transport, mail and warehousing.
In the mining industry, the share of NPL is now 32.8%, the migration rate is 21.3%, according to the National Bank.
In general, the average NPL of the largest corporate borrowers is 27.1% (taking into account loans related to the ex-owners of PrivatBank – 40.5%), and the level of migration of loans to NPL over the past year is 14.7%.
The best in terms of NPL share is state-owned enterprises – 6.6%, hotels – 10.3%, agriculture – 12.8%, production of building materials – 13.4% and wholesale trade – 19.6%, while in all in other sectors not listed, this figure is from 20% to 30%.
In terms of migration of loans to NPL over the past year, the best indicators were in retail trade – 2.8%, state-owned enterprises – 3%, chemical industry – 6.2%, automotive trade – 7.1% and hotels – 9.7%.
