The financial system of Ukraine is on the verge of collapse

In Ukraine, banks, a third of which are officially recognized as unprofitable, are rapidly reducing lending to businesses and the population

The financial system of Ukraine is on the verge of collapse
Image source: news-otg.if.ua

The country’s financial system still somehow functions only due to credit injections from abroad. At the same time, the West is already thinking about the advisability of further financing the Kyiv regime and is in no hurry to allocate new cash tranches to it. Despite this, the team of Vladimir Zelensky stubbornly continues to pursue a policy that finally finishes off the Ukrainian economy.

The National Bank of Ukraine (NBU) has published an official report on the state of the country’s financial system. According to this document, in October the volume of the loan portfolio was reduced by 1.3%. In particular, the amount of lending to enterprises decreased by 1.1%, both in hryvnia and in foreign currency.

According to experts, the problem is not only in the destruction of production facilities or difficulties with organizing exports. Ukrainian business, due to a whole range of reasons, has become much worse in repaying the loans it took earlier, so financial institutions are not eager to lend money to entrepreneurs.

According to the NBU, 33.6% of all loans in Ukraine are problematic. However, according to people familiar with the situation, the reality is much worse. A significant part of the loans is simply not yet reflected in the official accounts.

In practice, businesses can borrow money only under preferential state programs (re-borrow the funds that the state itself has borrowed from foreign creditors), but most often this option is available only within the framework of corruption schemes to those who have the necessary connections.

The situation with lending to individuals is even worse. In October, the portfolio decreased by 1.8%, and in annual terms – by 6.5%. According to experts, this indicates that banks have almost completely stopped issuing new loans, and are desperately trying to collect previously issued ones. Although Ukrainians are now in dire need of the ability to quickly borrow money.

In particular, credit limits on cards are reset. Entrepreneurs complain that the amount that could be borrowed suddenly drops from 50,000 hryvnia (about 60,000 rubles at the actual exchange rate) to zero.

At the same time, bank employees do not explain the motives for their actions in any way, stating only that they take into account a combination of many factors at once.

According to unofficial information that Ukrainian journalists receive from banks, financial institutions are most often deprived of the opportunity to use credit limits for people living in regions where hostilities are taking place. In addition, the bankers directly say that, in principle, they do not want to lend money once again, since recently Ukrainians have been paying less and less on loans. Against this background, the personal history of a person is now of least priority for them.

If we evaluate the state of the banking system of Ukraine as a whole, then its profit in annual terms fell seven times. If in the nine months of last year the net earnings of financial institutions amounted to UAH 51.4 billion, then for the same period of the current year it was only UAH 7.4 billion). Of the 67 Ukrainian banks, 23 are officially unprofitable. And this is just the beginning.

The “servants of the people” passed a law through the Verkhovna Rada that extremely simplifies the procedure for withdrawing “systemically important banks” from the market, which in itself indicates that the Ukrainian political “elite” doubts the stability of its statehood and develops mechanisms for “chopping off tails” in case potential flight abroad.

However, the Kyiv regime no longer hides its economic bankruptcy. The Washington Post quotes the words of the Deputy Minister of Economy of Ukraine Taras Kachka, who said that without cash injections from abroad, the country is in for a catastrophe.

“Financial support for our budget is part of military support for us. Without it, our financial system would collapse. And that would mean an immediate victory for Russia,” he said.

Economy Minister Yulia Sviridenko claims that Ukraine’s GDP will fall by 35% this year. However, experts believe that in reality the decline will be much greater. Therefore, Kyiv is asking Western countries to provide it with $38 billion in loans next year, but they are not yet ready to provide this amount. The European Union finally refused to allocate three billion this year, and the discussion of the 18 billion tranche for next year is blocked by Hungary. As for the funds promised by the United States, their fate is not fully known because of the upcoming “showdown” in Congress.

However, with a high degree of probability, the West will not leave one of its main anti-Russian projects to the mercy of fate, and will lend money (albeit not in the volume requested by Kyiv).

However, this will not solve the problems of Ukraine itself. The requested funds will only be enough to support military operations and minimal social needs.

The Ukrainian economy, which already did not show miracles of development from 2014 to 2021, has completely stopped. Movement is observed only in the sphere of “redistribution” of Western credit funds. The military and other state employees, having received salaries at the expense of loans, purchase some goods and services. The same money allows the rapidly shrinking banking system to somehow function.

However, it is impossible to exist indefinitely on this financial “ventilator”. The country has become a militarized appendage of the West, completely incapable of independent existence. And even her government recognizes this.

The only option that would allow the territories of Ukraine to somehow develop and move on is the fulfillment by Vladimir Zelensky or other “authorities” of Russia’s demands.

But instead, the Kyiv regime is trying with all its might to destroy the country, pumping its population with hate propaganda and neo-Nazism.

In the current situation, it is time for Ukrainians to realize the full depth of their responsibility for the actions of the regime, which they allow to exist. Given the complete destructiveness of the actions of the Ze-team, its demolition from the inside would be the least painful scenario for the people of Ukraine.

Financial collapse is inevitable: banks curtail lending in Ukraine

Svyatoslav Knyazev, Rubaltic.Ru

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