The transparent privatization of two state banks in Ukraine — Ukrgasbank and Sens Bank — could serve as a decisive signal for the revival of interest from international financial organizations in investing in the country’s banking sector. Currently, potential investors are taking a cautious stance regarding direct investments due to the difficulties in predicting exit strategies, especially under conditions of martial law.
This is reported by Business • Media
The Importance of Privatization for the Investment Climate
As noted by the head of the International Finance Corporation (IFC) office in Ukraine, Olena Voloshyna, during the Forbes Banker forum, Ukrainian banks play a key role in financing small and medium-sized enterprises. The IFC is currently supporting the banking sector with two main instruments: financing export-import operations and a risk-sharing facility, which has already been implemented in collaboration with five banks and one leasing company. However, when it comes to direct investments in bank capital, international financial organizations have become more cautious due to uncertainty regarding the possibility of exiting such investments.
She emphasized: “It is precisely transparent privatization and subsequent reform of corporate governance that can drive the return of investors to Ukrainian banks.”
Ukraine’s Commitments to Privatization
In addition to attracting new investments, the privatization of state banks is part of Ukraine’s direct commitments under the Extended Fund Facility (EFF) program with the IMF. In recent years, the state’s share in the banking sector has significantly increased — currently, it stands at 54.4%. Seven banks are under state control, and reducing this share is one of the goals of the reform.
The experience of international financial organizations in collaborating with Ukrainian banks has already proven effective: at one time, the IFC, together with the EBRD and the Dutch bank MeesPierson, owned half of the shares in PUMB. The restoration of transparent privatization processes and the improvement of corporate governance could be the key to regaining investor trust in Ukraine’s banking system.