KIEV, May 23 - Moody's Investors Service maintains a negative outlook for Ukraine’s banking system, unchanged since 2009.

"The outlook principally reflects our expectations for a severe economic contraction in 2014, a doubling of banks’ nonperforming loans (NPLs) and a depletion of capital buffers due to credit costs," the agency stated.

"Ukraine (Caa3 negative) faces serious internal uncertainty and external geopolitical tensions with its main trading partner, Russia (Baa1 on review for downgrade). Moreover, the local currency has depreciated 30% against the US dollar since the beginning of the year, and the balance-of-payments situation is precarious. Our central scenario is for Ukraine’s GDP to decline by 5%-10% this year, which would be a smaller contraction than the country experienced in 2009," reads the report.