OREANDA-NEWS. December 10, 2010. NBU prompts banks to write off impaired loans by Dec 31, 2010, the regulator’s letter dated Dec 8 says.

Millennium Capital deems this news as NEGATIVE for banks. While writing down NPLs, the regulator obliges banks to comply with the special resolution (NBU Resolution #424), which, although simplifying the write-off procedure, does not actually alleviate the tax pressure on banks. Therefore, an immediate write-off of all delinquent loans within a month remaining before the year end will adversely affect the banks’ bottom line in view of huge tax obligations accrued on the provision funds released.