Ministry of Finance about Reforming the Banking System: the Main Goal is to Reduce State Share in Banking System to below 25%

On November 02, 2021, a working meeting was held to discuss progress in the privatization of the state share in Ukrgasbank. Deputy Minister of Finance of Ukraine for European Integration Yuriy Draganchuk, Chairman of the National Bank Kyrylo Shevchenko, and representatives from the management and supervisory boards of Ukrgasbank took part in the meeting.

According to the foundations of the strategic reform of the state banking sector, Ukraine aims to significantly reduce the share of the state in the banking system to create a level playing field for the development and improvement of the country's financial system. The first step in implementing this task was the approval by the International Finance Corporation (IFC) of the World Bank Group of a loan for Ukrgasbank with the possibility of further conversion into equity. In March 2021, the bank already received a loan of EUR 30 million.

"The main goal of the Ministry of Finance as a shareholder remains to reduce the share of the state in the banking system to below 25% in 2025. The partnership with IFC and the transformation processes that Ukrgasbank is undergoing to meet its strategic objectives significantly improve its attractiveness for further privatization. Privatization of Ukrgasbank should become the Government's success story and a solid example for all investors on how attractive the Ukrainian banking market is," said Yuriy Draganchuk.

Also, Yuriy Draganchuk said that the cooperation with the IFC is effective, in particular regarding the procedure of involving financial advisors. It should be as transparent as possible and follow the requirements of the legislation. The next step is to choose the best sales option for the financial institution.

The participants of the meeting discussed the status of Ukrgasbank's privatization roadmap. Among other banks with state shares, Ukrgasbank is the most prepared for privatization. This is evidenced by its operational efficiency and low level of troubled assets.

Successful completion of Ukrgasbank's privatization will send a powerful signal to all investors that the country is fulfilling its obligations to reform Ukraine's banking sector and is building a sustainable banking model based on global best practices.