After four-year break, NBU will return to three-stage bank inspection in 2025

Next year, for the first time since the full-scale invasion, the National Bank of Ukraine (NBU) will return to a full-fledged three-stage assessment of the resilience of the banking system, the regulator’s website reported on Monday.

“The adaptation of banks to work in a full-scale war and their fairly high financial results make it possible to return to the usual practice of annual assessment. Ultimately, this exercise should reveal possible weak links and, if necessary, strengthen them so that the banking system can continue to successfully respond to existing and potential challenges,” NBU Governor Andriy Pyshnyy said.

Thus, the assessment of the resilience of the banking system in 2025 includes three stages: mandatory for all banks asset quality review (AQR) with the help of independent auditors, extrapolation by the National Bank of the results of an in-depth audit of assets within the AQR for banks whose assets were subject to an in-depth audit, as well as stress testing by the regulator of the largest banks under the baseline and unfavorable scenarios based on the financial statements of financial institutions with a forecast horizon of three years.

At the same time, according to the published concept for assessing the resilience of banks in 2025, the central bank has softened the preconditions for conducting an in-depth audit: if in 2021 a financial institution could make seven mistakes in managing the assets of legal entities and individuals, then in 2025, in order to conduct an in-depth audit, four of these mistakes must be such that they led to an adjustment in credit risk.

The NBU informs that it plans to approve the terms of reference for the assessment of the sustainability and the list of banks to which the stress test will be applied in December of this year, to complete the first stage of the assessment in April 2025, the second – on July 10, and the third – on August 10 of the following year.

According to the schedule published by the regulator, on August 1, 2025, banks must reflect the results of the asset quality review in their reports, and on August 15 and September 15, 2025, they are obliged to submit to the NBU the programs for the second and third stages, respectively.

It is assumed that the banks will implement the programs approved by the National Bank by the end of next year, and the results of the sustainability assessment will be published by the same time.