National Bank of Ukraine updated requirements for banks’ calculation of the minimum size of exposures weighted by credit risk. Such exposures reflect potential unexpected losses that may arise as a result of credit risk on active operations of banks and must be covered by capital.
The NBU explained that these changes are part of the gradual approximation of the legal framework of Ukraine in the field of banking regulation to the standards of the European Union.
Currently, banks already use exposures weighted by credit risk, while complying with the minimum requirements for capital adequacy, as provided by the Instruction on the procedure for regulating the activities of banks. However, the current methodology is based on previous principles proposed by the Basel Committee on Banking Supervision.
The updated requirements include:
- expansion of the list of exposures to which risk weights are applied taking into account credit ratings;
- the use of reduced risk weights for exposures related to small and medium-sized businesses, as well as for those secured by residential real estate;
- expanding the list of instruments and protection providers accepted to reduce credit risk.
The changes will make it possible to more accurately assess potential losses from credit risk, which will positively affect the financial stability of the banking system.
The implementation of the new requirements will take place in stages: banks must develop internal regulations by March 1, 2026, testing will continue from March to August, and a full transition to the new model will begin from August 1. The requirements were approved by NBU Resolution No. 43 of April 3, 2025, which comes into force on April 9.
