MOSCOW (Sputnik) — Ukraine's non-performing loans made up over 30 percent of total loans in 2016, according to World Bank figures. This has been on the increase since the 2009 global financial meltdown, when the share of NPLs fell from almost 60 percent to less than 4 percent. The current level is far above the global average, which is below 4 percent.
"The EBRD is joining forces with local authorities to help implement a new financial restructuring procedure in the Ukrainian banking system in order to reduce the amount of non-performing loans (NPLs) and in the context of wider efforts aimed at support for the financial sector in the country," EBRD said in a statement.
The financial institution plans to offer financial and logistical help alongside the Independent Association of Banks of Ukraine to local bodies dealing with individual debt restructuring. The procedure, stipulated by a restructuring law adopted by Ukraine with EBRD and World Bank input last year, will involve new repayment rescheduling mechanisms for companies finding themselves in deep water as well as partial debt writeoffs and converting debt into assets.
"This truly revolutionary procedure is designed to address the issue of NPLs in Ukraine, which rank among the highest in Europe. It provides a much-needed out-of-court loan restructuring mechanism for market participants and will help to preserve jobs as well as restore viable businesses," EBRD Managing Director for eastern Europe and the Caucasus Francis Malige was quoted as saying in the statement.
