The National Bank of Ukraine (NBU) has revised the approaches used by banks to assess credit risk for legal entities operating in frontline areas and those that have suffered significant losses due to the war or natural disasters, allowing banks to take forecast data into account when evaluating such borrowers, according to a statement on the regulator’s website.
The updated guidelines aim to provide more accurate and realistic assessments of creditworthiness in regions affected by conflict and disaster. By incorporating forecast data, financial institutions can better predict the future financial performance of businesses in these areas. This adjustment is expected to help mitigate the adverse effects of economic instability on local enterprises.
The NBU’s decision comes amid ongoing challenges posed by the war in Ukraine, which has significantly impacted the country’s economy and financial systems. The central bank has been working to implement measures that support economic resilience and ensure continued access to credit for critical sectors. This change is part of a broader effort to stabilize the financial market and support businesses that are essential to the national economy.
Financial analysts have noted that the new policy may help reduce the number of loan defaults in affected regions, as banks will have a more comprehensive understanding of the borrowers’ financial outlook. However, the effectiveness of this measure will depend on the accuracy of the forecast data provided by businesses and the ability of banks to properly analyze and interpret this information.
As the situation in frontline regions continues to evolve, the NBU is likely to monitor the implementation of this policy closely. The central bank has emphasized that the revised guidelines are a temporary measure that will be reviewed periodically to ensure they remain appropriate and effective in addressing the ongoing challenges faced by businesses in conflict-affected areas.