FORMALISATION OF THE TREND AND FINANCIAL STABILITY OF UKRAINE'S BANKING SYSTEM UNDER THE CONDITIONS OF MARTIAL LAW

Abstract

Since the beginning of the war on the territory of Ukraine, the banking system has undergone significant upheavals and is still functioning in a state of stress and uncertainty. Banks continue their activities in conditions of high risk, trying to fulfill their obligations to clients and comply with the regulations of the National Bank of Ukraine. However, certain transformations are taking place in the banking sector, which requires consolidating the efforts of the state, the private sector, partner countries, and international financial and credit organizations. The article is devoted to researching development trends and the financial stability of Ukraine's banking system in the crisis caused by Russia's full-scale invasion. The article aims to study trends in the development and functioning of Ukraine's banking system in the conditions of war and to analyze its financial stability and the adequacy of the main capital of the country's banks. The article analyzes the macroeconomic environment in which domestic banking institutions operate and identifies the risks that directly affect the effectiveness of their activities: macroeconomic risk, credit risk, currency risk, and liquidity risk. The article covers the volume of bank profits during the period of martial law and before its beginning and the profitability of the banking system's capital in general. The top 10 banks by the size of the net profit in the total profit of all country banks have been determined. The author has considered changes to the tax code regarding the taxation of excess bank profits while highlighting positive aspects. The article presents the results of assessing the financial stability of Ukraine's banking system and a rating of the stability and reliability of banks in 2020-2023. The author established the following indicators: the ability of the bank to meet the requirements of customers, immediate (without delay) return of funds from deposits, active support of shareholders and the state (aspiration to increase capital and liquid assets (resources), level of stress resistance, assessment of investor loyalty, results of analyst research. Based on the macroeconomic forecast, alternative scenarios (positive and negative) of the adequacy of banks' core capital in the forecast periods of 2024-2026 have been demonstrated.