The National Bank of Ukraine (NBU) released an overview of the banking system's performance over 2014 on Thursday.
There was significant turbulence in geopolitics and in macroeconomic conditions in 2014. As a result, the entire banking sector was vulnerable to a number of risks, the largest of them being in credit. Borrowers lost the ability to borrow due to weakening credit reliability and the number of underperforming and nonperforming banks and lenders increased.
A majority of net losses were in the area of loans and their loss provisions, with their share of total expenses climbing to 39.3 percent from 16.7 percent at the end of 2013.
NBU said 40 percent of losses occurred with banks that lost solvency and placed under provisional regulation. Excluding these losses, net loss from the banking sector reached approximately $1.34 billion.
NBU said the Ukrainian government has allowed for improvements and recovery efforts to be made.