(Refiled to correct typographical error in first paragraph)
KIEV, Oct 20 (Reuters) - Ukraine’s central bank estimates that the country’s 15 largest banks, including the local subsidiaries of three foreign firms, need more than $4 billion in total additional capital according to the results of its stress tests, the bank said on Monday.
Ukraine’s 170-strong banking industry has been under pressure since the 2009 crisis due to macroeconomic instability, weak external finances and a poor credit portfolio. The situation has worsened this year after the falling-out between Kiev and Moscow.
The country’s economy is shrinking rapidly due to the damage inflcited on its industries in the east by the military conflict with pro-Russian separatists. With the hryvnia down about 40 percent against the dollar so far this year, many borrowers are struggling to service and repay their foreign currency loans.
Ukraine has recently tested the sustainability of the 35 largest banks after the International Monetary Fund approved in April a $17.1 billion programme to support reforms in Ukraine including measures to strengthen the country’s banking system.
Citing the results of these stress tests, Oleksandr Pysaruk, first deputy governor of the central bank, said out of a total of 56 billion hryvnias ($4.4 billion) that the top 15 banks need in additional capital, subsidiaries of foreign banks need 20.5 billion hryvnias ($1.6 billion).
“Three banks with foreign capital -- two Russian and one Western -- need additional capitalisation,” he told reporters.
He declined to name the banks concerned but said the Russian lenders had already confirmed their ability to raise additional capital. He said he was confident that the Western bank would have no problem boosting its capital either.
Subsidiaries of Russia’s VTB, VEB, Sberbank , and Alfa Bank, as well as European lenders including Raiffeisen, UniCredit, and BNP Paribas are ranked among Ukraine’s 15 biggest lenders.
Pysaruk said that those top 15 banks, which account for 68 percent of the country’s bank assets, had to bolster their capital by the end of this year.
A further 20 banks, which account for 15 percent of all assets, have until the end of February next year to boost their capital with their shareholders needing to raise a total of 10 billion hryvnias.
State-owned banks need about 12.5 billion hryvnias, a sum the government will inject into three lenders - Oshchadbank, Ukreximbank and Ukrgasbank, he added. (1 US dollar = 12.8000 Ukraine hryvnias) (Reporting by Natalia Zinets; Editing by Maria Kiselyova)