Credit unions required to curtail lending and deposit issue

Financial Services Commission undertook to save the credit unions. Last week, the regulator approved the methodical recommendations to the COP on measures that provide a way out of financial distress. Simultaneously, the commission preparing to launch a joint campaign with the NBU to restore liquidity to credit institutions.

According to the non-bank regulator, the situation in the sector of credit unions - the worst in the non-banking financial market. At the temporary custody of the Department of Administration Financial Services Commission is already 15 of the COP, which is concentrated around one third of the total assets on the market. The main reason for which the financial institution moved into the category of problem - a sharp decline in liquidity, triggered by the dizzying rise in rates of problem debts.

According to our estimates, the proportion of bad loans in the portfolios of the COP to date, reaching 30%, particularly in our union - 25%. In the last year the figure for the system increased by about half, - said Chairman KS Valadar Natalia Gotz.

If the pre-crisis times, theproportion of delay is usually not more than -6%, while it currently accounts for 24%, and in some major unions - 90-95%. Liabilities same unions are still continuing to decline. On January 1, 2009 deposit, the members of the National Association of Credit Unions of Ukraine (Garant) accounted for 1.3 billion UAH., July 1, they fell to 946 million grn. , - said chairman Peter Garant Kozinets. Understandably, the financiers do not build up loan portfolios - the volume of loans disbursed to the market average fell more than twice. Experts predict that within a month or two the situation in many unions can and do become Akhova. A new wave of crisis and the further reduction of the solvency of the population will double the current level of delay and finally stalled the process of returning the deposits of the COP.

Anticipating the next wave of scandals in the market, Financial Services Commission has developed recommendations for the Trust to resolve the crisis. Particularly advised to be careful about them in conducting monetary policy: not to issue long loans, limiting the term of the loan six months, and the amount - the average size of deposit in each individual of the COP, request the maximum loan security (collateral value should not less than twice the amount of loan), scrupulously considered candidates guarantors.

However, financial experts assert that without the guidance and control possible conditions have tightened lending, and some have stopped lending altogether. If in times of stable unions - members of the Garant monthly issued loans of approximately $ 160 million UAH., Now - only 60-70 million UAH. It is not only a lack of resources, but also very high risks that exist today - notes Kozinets. With increasing problemki Union encouraged to fight with the restructuring and extension of loans, and if necessary to resort to harsher measures: to attract collectors, or to perform forced alienation and sale of mortgages.

However, the latter measure is already very actively intervenes unions, posing for automobiles or mortgages. We only make loans secured by real estate. Today, as the implementation of pledges amount of problem loans in our portfolio began to decline gradually, - said Natalia Gotz.

regulator specifically warned against the introduction of wards in the credit and deposit instruments of foreign exchange clauses, insisting that unions are no longer tied to the course of SLE or amount of payment on the loan or deposit rates. With the current volatility in the currency market and the continuous devaluation of the currency it would be fatal for the COP borrowers whose credit commitments in UAH equivalent rise sharply, and for themselves financial establishments, which would be difficult to pay off depositors. By the way, return the deposit with Union encourages on-demand customers (including early). In the Financial Services Commission stressed that none of the problem of the COP under the control of the regulator does not impose a moratorium on satisfaction of creditors' rights. The law does not grant us this right. The only organ that is able to establish a moratorium - a court, and even then only in bankruptcy, - said the director of the Department of temporary administration of financial and credit institutions Gosfinuslug Galina Tretyakov.

In the near future the same time the regulator intends to help the Trust not only by word but by deed. Last week a joint meeting of representatives of the Financial Services Commission and the National Bank, where they discussed options for using the COP. NBU expressed willingness to resolve the issue regarding money that are suspended on payment and deposit accounts with problem banks. We are gathering information on credit institutions, whose money was frozen, the size of blocked amounts, types of accounts opened in the troubled banks. The second problem, which has been discussed, - the refinancing of credit unions through the authorized financial institution. In order for this mechanism, it is necessary to collect data on software that can provide the COP for loans NBU, what we are doing today - told Tretyakov. According to preliminary estimates, in order to maintain liquidity and the resumption of credit unions need about 1.5 billion UAH.: According to various sources, mortgage liquidity is provided in the Constitutional Court from 20 to 50% of their loan portfolios. However, the unions objectively recognize that at best will be able to obtain from the National Bank is less than half that amount.