War Continues but Banks Are in the Black

People quening at an ATM of PrivatBank, Ukraine's largest and most profitable bank, taken over by the statefrom the oligarchs a few years ago.Kyiv 24 February 2022

Russian aggression did not cause the collapse of Ukraine’s financial system

Despite wartime conditions, it seems that Ukrainian banks are doing quite well. According to the National Bank of Ukraine (NBU), they booked a profit of UAH 24.7 billion in 2022 (1 UAH or hryvnia equals USD 0.027 or PLN 0.12 – ed.). This is less than a year earlier, when the profit was UAH 77.4 billion, but the industry still turned a profit. “As of 1 January 2023, 46 of the 67 solvent banks were profitable and reported a net profit of UAH 45.6 billion, which covered the losses of 21 banks for a total of UAH 20.8 billion. The industry’s profits are concentrated: the top five most profitable banks generated 89 percent of all profits”, the NBU reported on 10 February.

The NBU report did not tell the whole story. Each of the banks in the top five earned more than a billion hryvnias last year. However, while the Austrian Raiffeisen subsidiary made UAH 1.5 billion, Universal Bank UAH 2.4 billion, local Citibank UAH 2.8 billion, and Ukrsibbank UAH 3.5 billion, PrivatBank’s profit was UAH 30.3 billion. In other words, even if PrivatBank had had to cover the losses of all institutions which were in the red, it would still have been almost three times more profitable than the next best performer. PrivatBank is the largest player in the Ukrainian market, having been taken over by the state from the oligarchs a few years ago.