The Great Unburdening: How Writing Off UAH 140 Billion in Bad Loans Rebooted Ukraine’s Banking Giant and Its Entire System

February 6, 2026, Kyiv. Sometimes, to make a powerful leap forward, you must decisively shed the burden of the past. Especially if that burden is 140 billion hryvnias. That is precisely the historic step of balance sheet cleansing taken by the banking system at the end of last year, led by its flagship, PrivatBank. The figures released by the National Bank are not just impressive—they signal a quiet revolution whose results we will feel this very year.

In two decades of working in financial journalism, I have seen many reports. But the data published by the National Bank of Ukraine (NBU) on its Facebook page is not just dry statistics. It is the outcome of a long, arduous, and critically necessary effort to rehabilitate the banking sector, begun after the 2014-2015 crisis. And the main story here is not just a write-off, but a fundamental change in the rules of the game.

For international investors and analysts, this massive clean-up of Ukraine’s largest bank is a pivotal signal of systemic de-risking, potentially unlocking greater confidence and foreign capital inflows for the country’s reconstruction phase.

Figures That Take Your Breath Away: From 44% to 8%

Let’s just grasp the scale. Until recently, essentially every other loan at the country’s largest bank was considered non-performing (NPL). A share of 44.7% was a heavy ballast, shackling any initiative. The decision made in December 2025 radically changed the picture: the NPL ratio at PrivatBank plummeted to 8.45%. This is the lowest figure since the distant, pre-crisis year of 2009, and now it is even below the market average.

But PrivatBank was not alone. Similar, though less extensive, operations were carried out by other state-owned banks. The overall result for the entire system is a drop in the share of problematic loans from 24% to 14% as of January 1, 2026. Looking deeper, private banks with foreign capital are now the “cleanest” (only 6.5% NPL), marking the best indicator in a decade and a half.

Not an End, But a Beginning: Why a Write-Off is Not a Loss, But an Investment

This is the moment to stop the skeptic who is ready to exclaim: “But that’s UAH 140 billion written off into thin air! Where is that money?”. The answer is paradoxical: that money now exists. It is in the bank’s potential, which can finally breathe with full lungs.

Writing off old, non-performing assets is not charity. It is a strict accounting and managerial necessity. A balance sheet freed from “bad” debts allows the bank to adequately assess its risks, allocate capital more efficiently, and, most importantly for all of us, — lend more and more willingly to the real economy.

And we are already seeing the first fruits. Net hryvnia loans to businesses grew by a fantastic 35.6% year-on-year in December, and to households by 32%. These are not abstract percentages; these are new machines for factories, equipment for farmers, loans for small business development, and housing for families. The preliminary profit of solvent banks for 2025 of UAH 126.8 billion (approximately $2.94 billion / €2.49 billion*) is no coincidence but a direct consequence of this recovery.

What Does This Mean for Business and for All of Us?

As someone who remembers the credit boom of the mid-2000s, the collapse of 2008, and the nationalization of 2016, I see several fundamental shifts in this news.

First, trust. A bank with a transparent, healthy balance sheet is a more reliable partner for both depositors and international financial institutions. This reduces the cost of funding for the entire country.

Second, credit availability. Less “dead weight” on the balance sheet means more resources for new loans. And banks, judging by the trends, are already taking advantage of this. Businesses, which have often complained about the unavailability of financing in recent years, have received a powerful signal: the credit tap is beginning to open.

Third, the competitive field. When the largest player finally gets rid of a chronic illness, it forces everyone else to work more efficiently. Healthy competition for borrowers is always a boon for the economy.

Of course, one report does not cancel all challenges. But on February 6, 2026, we can state: the Ukrainian banking system has finally surgically removed a tumor that had been hindering its growth for years. Now it has a chance not just to survive, but to become a full-fledged engine for economic recovery and development. And that engine, it seems, has already started.

* Exchange rate as of 06.02.2026: 1 USD ≈ 43.1405 UAH ≈ 0.848 EUR. Calculations are for illustration only and are conditional. This information is not financial advice or an offer.