Non-bank financial institutions resume operations to the pre-quarantine level – reporting for 9 months of 2020



The National Bank summed up the results of the non-banking market for the first nine months of 2020. The results of the submitted reports show that all sectors of this market are gradually recovering, some of them – even to the pre-quarantine level of the first quarter of this year.

Insurance market: gradual recovery

  • In the third quarter, the number of insurance companies did not change and amounted to 215 insurers, of which 20 are engaged exclusively in life insurance.
  • Insurers’ assets continue to decline. From the beginning of the year, they decreased by 4.6% and amounted to UAH 61.6 billion at the end of the third quarter. 
  • The volume of insurance services provided after falling in the second quarter (UAH 9.4 billion) in the third quarter reached the indicators of the first quarter and increased to UAH 11.9 billion. In total, for 9 months of 2020, insurance services worth UAH 33 billion were provided.
  • The share of insurance premiums from individuals for 9 months was 49.6%, from legal entities – 40.9%, from reinsurers – 9.5%. 19.5% of insurance premiums were transferred to reinsurance, of which slightly less than half were transferred to reinsurance to foreign companies.
  • The level of payments has not changed and for 9 months of 2020 is 33.8%.
  • 16 insurers did not report (one company less than in 6 months of 2020), excluding companies registered in the temporarily occupied territories. Another 6 insurers, which submitted reports, have not been operating since the beginning of the year.
  • The number of insurers that do not meet the capital adequacy and solvency ratio decreased from 57 to 49 companies in the third quarter.

Credit union market: equilibrium

  • The number of credit unions in the third quarter decreased by one credit union and amounts to 327 institutions. The number of credit union members is also declining. As of September 30, 2020, credit unions have 442.9 thousand members. Among them, 27.6% actively use the services of credit unions.
  • At the same time, the volume of credit union assets is gradually, albeit insignificantly, growing. In the third quarter, assets amounted to UAH 2.6 billion, which is 2.5% more than at the beginning of the current year.
  • Equity of credit unions remains stable at UAH 1.016 billion. The total growth of assets is due to the growth of attracted deposits to deposit accounts. The amount of these contributions has increased by 7.3% since the beginning of the year (to UAH 1.42 billion).
  • The decline in the volume of services provided by credit unions, which began in the second quarter during the beginning of quarantine restrictions, stopped. The total volume of loans granted by unions in the third quarter increased by 20% to UAH 642 million, exceeding the volume of lending in both the first and second quarters.
  • There is a steady trend towards the deterioration of the credit portfolio of unions. Thus, the level of arrears on overdue loans of unions increased from 28% in the first quarter to 34.2% at the end of the third quarter of 2020.
  • As of September 30, 2020, 11 credit unions operate in violation of capital adequacy requirements (according to the results of 6 months of 2020, there were more violators – 12 credit unions).

Financial companies, lessors, pawnshops: sustainable growth

Financial companies

  • The number of financial companies in the third quarter decreased by 13 institutions to 1,025. All institutions that left the market did so voluntarily.
  • At the same time, the assets of financial companies increased by 8.1% from the beginning of the year and amounted to UAH 186.9 billion at the end of the third quarter (three times more than the assets of insurers).
  • The volume of loans provided by financial companies and financial leasing services even exceeded the indicators of the first quarter. Loans amounted to UAH 23.3 billion compared to UAH 21.8 billion in the first quarter; leasing volumes in financial companies – UAH 0.757 billion compared to UAH 0.272 billion in the first quarter.
  • Factoring services in the third quarter, on the contrary, decreased from UAH 22 billion in the first quarter to UAH 19.5 billion in the third quarter.
  • 160 financial companies did not provide financial services in the third quarter.
  • 56 financial companies (excluding those registered in the temporarily occupied territories) did not report to the National Bank for the third quarter of 2020.

Lessors

  • The number of legal entities-lessors in the III quarter increased by one company – to 145.
  • The volumes of leasing services provided by legal lessors in the third quarter increased to UAH 3.35 billion and exceeded the indicators of the first and second quarters.
  • 35 lessors have not concluded any leasing agreements since the beginning of the year.

Pawnshops

  • The number of pawnshops for the third quarter decreased by 2 and amounted to 304 institutions.
  • The assets of pawnshops have decreased by 9% since the beginning of the year – from UAH 4.35 billion to UAH 4.1 billion.
  • The amount of equity at the end of the third quarter amounted to UAH 1.7 billion.
  • The volume of loans granted by pawnshops in the third quarter of 2020 amounted to UAH 4.57 billion and exceeded the indicators of the first and second quarters (UAH 4.1 billion and UAH 3.3 billion, respectively).
  • 13 pawnshops have not provided services since the beginning of this year.
  • 18 pawnshops (excluding those registered in the temporarily occupied territories) did not report to the National Bank.

Summarized by performance indicators of non-banking financial institutions in terms of segments:

Performance indicators of insurance companies

Performance indicators of insurance / reinsurance brokers

Performance indicators of credit unions

Performance indicators of financial companies and lessors

Performance indicators of pawnshops

Source