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State-owned Banks

State-owned banks have a significant share in the banking system of Ukraine. It is one of the highest priorities of the Ministry of Finance to reform the state-owned banks. These reforms are conducted through the Strategic Principles for Reforming the State-owned Banking Sector, developed with the assistance of the International Monetary Fund, the World Bank, the International Financial Corporation and the European Bank for Reconstruction and Development.

The key objectives defined in the document are a fundamental revision of principles and mechanisms of corporate governance in the state-owned banks and focus on business and operational models of the state-owned banks aimed to achieve the maximum efficiency of these banks.

The work of the supervisory boards at the state-owned banks is conducted in accordance with recommendations of OECD and the Basel Committee on Banking Supervision:

  • At least 2/3 of the members of the boards should be independent.
  • Supervisory boards have specialized committees.
  • The remuneration levels align with the market median.

Achieving the goals set by the state requires a significant change in the business model and the implementation of the new mechanisms.

Further development of the banking sphere will be focused on two main tasks:

  • maximum client-oriented approach which will lead to maximum growth of income,
  • reform of the operational models.

The implementation of the Strategic Principles for Reforming the State-owned Banking Sector will provide:

  • Improvement of the mechanisms of corporate governance,
  • Growth in competitiveness and effectiveness of the state-owned banks,
  • Shifting the state-owned banks from unprofitable to profitable. This will save resources on the annual recapitalization of banks and will create additional sources of income for the state budget.