NBU prepares credit relief for businesses impacted by strikes on ports and logistics

The National Bank of Ukraine has urged banks to support enterprises whose financial condition has deteriorated due to systematic Russian attacks on energy, logistics, storage, and port infrastructure.

This was announced by NBU Governor Andriy Pyshnyi. According to him, the security situation is particularly felt by real sector enterprises that depend on maritime logistics.

Due to export restrictions, product supplies are delayed or temporarily suspended. Enterprises are experiencing worsening cash flows, accumulation of finished products, changes in prices and demand, and disruptions in production and logistics chains.

As a result, it becomes more difficult for businesses to service loans on time and attract new financing. This also creates additional risks for banks, as it may lead to a deterioration in the quality of their loan portfolios.

Pyshnyi emphasized that timely support for viable enterprises will help minimize potential credit losses and prevent temporary difficulties from turning into long-term economic problems.

What the NBU recommends to banks

The National Bank recommended that financial institutions individually review the situation of each borrower. Banks can restructure loan debt, change repayment schedules, or use other support tools provided for in their internal policies.

At the same time, restructuring should not be used to conceal the insolvency of enterprises.

Banks are also recommended to:

• constantly monitor the financial condition of enterprises, taking into account logistical constraints, changes in prices and demand, as well as loss of production and economic ties;
• use the regulatory features of credit risk assessment introduced by the NBU for the period of martial law;
• assess agricultural enterprises considering the full production cycle and seasonal fluctuations;
• ensure continuous lending to the agro-industrial complex, in particular for the autumn sowing campaign;
• more actively use state support programs and the possibility to accept finished products as collateral for loans.

Banks should pay special attention to enterprises operating in critically important sectors of the economy.

The NBU plans to temporarily change regulatory requirements

The National Bank also plans to adapt regulatory conditions to the current situation and expand the specifics of credit risk assessment.

In particular, banks may be allowed in certain cases not to apply individual default flags to legal entities requiring short-term restructuring. This approach will be used if there are grounds to believe that the enterprise will be able to overcome temporary difficulties and resume debt servicing.

In addition, the NBU wants to expand the potential to use the value of agricultural products that are in circulation or processing as collateral when calculating credit risk. To this end, it is planned to increase the liquidity coefficient for such collateral.

According to Pyshnyi, enterprises may have sufficient finished products, but due to temporary logistical problems, their sale is delayed.

The proposed regulatory changes will be temporary and will be in effect for one year from the moment of their introduction.

The NBU stressed that supporting businesses does not mean ignoring credit risks. Banks must continue to objectively assess the solvency of borrowers and not use the new measures to hide problem loans.

Based on materials from: Andriy Pyshnyi