The Banking Sector in Ukraine: Trends and Developments

 Summary

 One of the main areas of economic reforms in Ukraine is the banking sector. Over the last 3 years, the number of institutions on the market has shrunk by 87 due to the decisions of the supervisor, the National Bank of Ukraine. As a result, the number of active banks declined from 180 to currently 93.

 While this process of deleveraging was painful for many people in the short term, the long term economic benefits will certainly outweigh these costs. Recent developments in the sector give rise to the hope that a certain revival in lending is near, which would support the economic recovery.

 Following the recent nationalisation of Privatbank, with a market share of 21% the biggest bank in the country, the state owns now more than 50% of the banking system. Together with a blanket guarantee for all household deposits at the major state banks, this creates new challenges on the path towards a primarily market driven, sustainable financial system.

German Advisory Group Ukraine  – Newsletter_100_2017_German Advisory Group.pdf