KYIV, Feb 13 – The Ukrainian banking sector tripled its cumulative profits in 2019 in the sector’s massive turnaround, setting the stage for a robust economic expansion in 2020, a senior central bank official said Thursday.

The sector generated UAH 60 billion in 2019, up from about UAH 20 billion in 2018, and only three years after the government had resorted to baling out the country’s biggest bank, PrivatBank.

"I will disappoint critics that these are not super-profits of state-owned banks
from government bonds,” Kateryna Rozhkova, the first deputy governor of the National Bank of Ukraine, said in a Facebook post. “This is a real profit of the banking sector. If you look at the interest income of state-owned banks, the share of government bonds invested are only 12%."

PrivatBank led the banking sector last year, reporting UAH 32 billion in profits in 2019, up from UAH 11.8 billion in 2018, while the number of unprofitable banks declined to 6 from 13.

“The return on equity (ROE) of Ukrainian banks in 2019 amounted to 34.2%,” Rozhkova said. "This is higher than the general European rate – 7%, and higher than that of neighboring countries: Hungary – 18%, Romania – 17%, and the Czech Republic – 16%.”

The government was forced to nationalize PrivatBank in 2016 after it had reported a capital shortage of $5.6 billion.

Billionaire Ihor Kolomoisky, the previous owner of PrivatBank, filed more than 400 lawsuits against the Ukrainian government, insisting on getting the bank back, and the issue had attracted international attention.

The International Monetary Fund, fearing potential corruption, has specifically warned Ukraine that it should be return PrivatBank or otherwise it would be forced to suspend crucial loan to the country.

“It is paramount to safeguard the gains made in cleaning up the banking system and recover the large costs to the taxpayers from bank resolutions,” Kristalina Georgieva, the Managing Director of the IMF, said in her statement in December. (om/ez)