Banking sector in Ukraine: The road to recovery

The recent newsletter, Banking sector: The long and winding road to recovery, by the German Advisory Group, shows that the Ukrainian banking sector has gone through a substantial overhaul. Thanks to reforms initiated by the National Bank of Ukraine, more than half of the banks has been removed from the market and the reamining banks have started to rebuild their capital. This has increased the confidence in the Ukrainian financial sector and eased the liquidity situation. The reforms have however had one sideeffect: the state ownership in the banking sector has increased with the four largest banks now beeing state owned.

For a full recovery and a sustainable restart in lending, several steps remains. One key issue is, according to the German Advisory Group, increased protection of creditors to reduce the risk of lending. You can read the full newsletter here.