\u201cAs a result, a number of industries saw a slowdown in production during the first quarter, with prices being the main driver of corporate revenue growth. \u2026 Furthermore, the consequences of these attacks, combined with the additional effects of the war in the Middle East, made the National Bank maintain relatively tight monetary conditions,\u201d NBU First Deputy Governor Serhiy Nikolaichuk said during the briefing<\/a>.<\/p>\n Pervin Dadashova, director of the Financial Stability<\/a> Department, said the conflict in the Middle East also drove up production costs, particularly for sectors that are heavily dependent on imports. These include the agricultural sector, which relies on imported fertilizers, and sectors that depend on the prices of imported energy resources.<\/p>\n While the central bank\u2019s assessment is currently based on first-quarter data, Dadashova said a clearer picture will emerge as companies file their second-quarter financial statements.<\/p>\n <\/p>\n <\/a><\/p>\n Other Topics of Interest<\/p>\n Zelensky Warns of Massive Russian Overnight Strike on Ukraine<\/a><\/p>\n Zelensky warned of an imminent massive Russian strike based on intelligence data, urging Ukrainians to seek shelter and heed air raid alerts.<\/p>\n \u201cAssuming that the main shocks are already behind us, we will likely still see some negative impact in the second quarter \u2026 We have seen a decline in this operating margin. To a large extent, this is precisely the result of the performance over the very last few months,\u201d Dadashova said, replying to a Kyiv Post question.<\/p>\n Corporate financial health remains solid despite profitability squeeze <\/p>\n At the same time, the central bank said the overall financial health of Ukrainian companies remains solid.<\/p>\n Around one-third of surveyed firms were rated financially \u201csatisfactory,\u201d while roughly half, by asset value, fell into the \u201cstrong\u201d or \u201cexcellent\u201d categories, supported by moderate debt levels and ample liquidity.<\/p>\n Profitability, however, remains the main area of concern, particularly for companies operating closer to the front line, where revenue growth has lagged behind the rest of the country.<\/p>\n Despite these pressures, net hryvnia lending has grown more than 30% year-on-year. Banks are increasingly directing credit toward long-term investment projects with maturities exceeding three years, as well as machine-building \u2013 including defense-related manufacturing \u2013 and the energy sector.<\/p>\n According to the NBU, the number of active corporate borrowers has roughly doubled over the past decade to about 17,000, indicating broader access to financing across the economy, even though only around one-third of Ukrainian companies currently use bank financing.<\/p>\n Rising labor costs, driven by competition for workers, have also weighed on profitability, Dadashova said.<\/p>\n Corporate margins were already weaker in 2025 than in 2024, and the outlook for 2026 suggests further deterioration. Nevertheless, she emphasized that the situation is not critical.<\/p>\n Overall, companies maintain moderate debt burdens, and most borrowers currently have sufficient resources to service their loans. When businesses face financial difficulties, banks tend to act preemptively, offering restructuring tools to help companies get through the difficult period.<\/p>\n Windfall tax already shapes bank behavior ahead of 2027 extension <\/p>\n That lending expansion, however, may face growing constraints from government policy.<\/p>\n A windfall tax on bank profits is set to be extended into 2027, and the NBU said the mere prospect of that extension is already shaping banks\u2019 behavior in the second half of this year and into 2026, not just in some distant future.<\/p>\n Capital adequacy across the banking sector stood at 17.6% under the latest data, supported largely by the retention of last year\u2019s profits. However, the ratio declined from 17.3% to 16.4% during 2025 as banks reinvested earnings into expanding their loan growth rather than strengthening capital buffers.<\/p>\n Rapid credit growth has placed additional pressure on capital adequacy. Although bank profits remain at record levels, the profits retained and added to capital in 2025 were not sufficient to fully offset the impact of loan growth.<\/p>\n Looking ahead, Nikolaichuk said the NBU does not believe banks can sustain their current level of profitability, while simultaneously meeting capital adequacy requirements, paying a 50% profit tax, and continuing to expand lending to the economy at more than 30% a year.<\/p>\n Average capital requirements are expected to rise toward 14% by the end of 2027 as the NBU phases in EU-aligned standards. Even then, they would remain below the roughly 16% regional average for Central and Eastern Europe, the NBU noted.<\/p>\n According to Nikolaychuk, return on equity for non-state banks has already slipped to 15% \u2013 which is less than in some Central and Eastern European banking systems \u2013 and is no longer adequate compensation for the risks of operating in a wartime economy.<\/p>\n If the windfall tax persists, the NBU estimated credit growth could slow to a 15-20% annual pace, as banks would lack the capacity to generate enough capital to simultaneously sustain higher buffers and 30%-plus lending growth.<\/p>\n![\"Zelensky](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/4656904bdeddfea6f791f1ceee5e08f0.jpg\")
<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/58f641dca73cfdae3bb9ad5f130dfc5a.png\")
<\/a> NBU\u2019s Director of Financial Stability Department Pervin Dadashova presenting the central bank\u2019s Financial Stability Report on June 30, 2026. (Photo courtesy of the National Bank of Ukraine) <\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/2ac89056b95d254da4aca6228c6508fb.png\")
<\/a> NBU First Deputy Governor Sergiy Nikolaichuk presenting the central bank\u2019s Financial Stability Report on June 30, 2026. (Photo courtesy of the National Bank of Ukraine) <\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/79ec5cbce0046343cd100c91be1dfa13.png\")
<\/a> From left to right: NBU\u2019s Director of Financial Stability Department Pervin Dadashova, NBU First Deputy Governor Sergiy Nikolaichuk, and NBU Press Secretary Andriy Kravets are presenting the central bank\u2019s Financial Stability Report on June 30, 2026. (Photo courtesy of the National Bank of Ukraine) <\/p>\n