Some 97% of financial institutions’ managers assess shock resistance as average, above – NBU survey

Bank and non-bank financial institution managers have improved their assessments of the financial sector's resilience to significant negative events for the third time in a row, according to the results of the Survey on Systemic Risks in the Financial Sector for November 2024, the National Bank of Ukraine (NBU) website reports.

According to the results, 97% of respondents assessed shock resistance as average and above, and the overall balance of responses has been at its highest level since the survey was introduced in 2018 for the third half of a year in a row.

More than half of respondents do not expect changes in the financial sector in the next six months, while the share of those who expect deterioration has increased from 18% to 27% compared to the previous survey. The share of financiers with optimistic expectations, on the contrary, decreased from 18% in May to 12% in November.

At the same time, more than half of respondents reported that the state of Ukraine's financial sector has not changed over the past six months, while more than a quarter of them indicated that it has improved.

The share of top managers who consider the current state of the financial sector satisfactory and good decreased to 90% in November from 94% in the May survey.

The share of respondents who considered the level of risk in the financial sector high or very high remained at 41%. At the same time, in November, a greater number of respondents assessed its level as low: 12% compared to 6% in May this year, while the share of top managers of the financial sector who assess it as average decreased to 47% from 53%.

The main source of risks in the financial sector is the war with Russia. The top five also included risks related to the overall level of corruption in the country, the activities of law enforcement agencies and the judicial system, the quality of legislation and the tax system, and the quality of human capital in the financial sector.

However, according to the survey results, the level of risk of fraud and cyber threats has significantly decreased – to 15% from 29% in May.

Almost 70% of respondents reported that the propensity of financial institutions to take risks has not changed over the past six months, while a quarter of respondents reported an increase.