According to preliminary results for 2020, PrivatBank earned UAH 25.3 billion in profit, or UAH 7.3 billion less than in 2019.
The Bank reports that, by the end of the year it had provisions totaling UAH 10.2 billion to cover possible risks due to the COVID-19 pandemic and legal risks, both of which affected net profit.
PrivatBank was able to increase its net commission income by 3%, to UAH 18.8 billion in 2020, despite the downturn in commercial activity by actively developing its digital services system and its #cashless network. Net interest income went up by 10% thanks to lower costs of funds. Customers’ cash in current accounts outpaced the growth of term deposits.
PrivatBank’s net loan portfolio was down by 8%, to UAH 55.0 billion, due to the suspension in raising credit limits during the quarantine period and more stringent requirements of borrowers. Thus, responsible lending helps customers make sound financial decisions under uncertain economic conditions caused by the pandemic.
At the same time, the Bank significantly reduced lending rates for small and medium enterprises, providing financing to SMEs worth UAH 8.9 billion. PrivatBank is the national leader in the number of loans issued to small businesses under the national “5-7-9%” Program. Today, every third loan under this program is issued by PrivatBank.
Altogether, PrivatBank earned UAH 27.2 billion in profit from customer transactions and banking operations. At the end of the year, PrivatBank's investment portfolio included, among other stocks, domestic bonds whose value, when repaid, will depend on the expected exchange rate of the hryvnia against the US dollar. Due to market fluctuations of the hryvnia in 2020, the value of domestic bonds increased and earned PrivatBank UAH 15.8 billion - a one-time income. This also compensated for losses from other exchange rate fluctuations worth UAH 7.5 billion. These losses are the result of the former PrivatBank’s risky policy of managing assets and liabilities prior to nationalization, which resulted in the value of US dollar liabilities significantly exceeding the value of the Bank’s assets. Since nationalization, the Bank has implemented prudent policies for managing these activities.
PrivatBank’s administrative & operating expenses went up 19% in 2020 with 12% related to payroll costs which reached UAH 15.7. Also to counter the consequences of the COVID-19 pandemic, PrivatBank made special payments to its network of employees and paid for PPEs and disinfection services for its 2,000 branches and 7,600 ATMs, as well as for medical equipment, including 27 lung ventilators donated to Ukrainian hospitals.
Clients' trust in the state-owned PrivatBank is growing every year. As of the end of 2020, client funds held by PrivatBank increased by 29% compared to 2019 to UAH 309.5 billion. PrivatBank’s retail customer base grew by 1.2 million. The Bank’s business client base expanded by a record 122,000.
PrivatBank appreciates the opportunity to be a reliable partner and financial advisor for its clients and looks forward to providing high quality responsible services in 2021 and beyond.