Ukrainian Banking Day at Hogan Lovells

The Strategy Council organised the 4^th Ukrainian banking day in London, in conjunction with sponsors Hogan Lovells. Each year the topics subtly shift, where previous years focused on conflict, resilience under pressure and protecting the system, to this year’s more positive focus on further modernisation, insurance and considerations for privatising the extensive state bank sector.

As with other soviet legacy banking systems, many of the banks are state owned with older bureaucratic systems, and even private banks are close to the state and IFI’s like EBRD and IFC as a source of liquidity. But the good news is that the banking system is in a good position with strong liquidity ( $70bn reserves), profitable and operating at equivalent debt ratios to EU banks, such as in Greece. Many of the banks are modernising rapidly, offering digital and mobile banking, especially new players like Monobank with over 9 million customers, capital ratios of 13.2% and gamified retail finances and dedication to continuous improvement.

Ukraine Banking is effectively preparing for integration into the EU and International banking system and has made strong moves for equivalence. Yannis Kyriakopoulos of Piraeus Bank chaired the panel on growth and risk and explored significant opportunities for Mortgages and a wider range of services from the banks, such as Insurance. Simon Cassey of Chesterfields commented on the tiny Reinsurance market that has great opportunity to develop especially where ceasefires to develop but given the enormous reconstruction requires $500bn plus the Insurance syndicates are currently unable to cover this liability.

Elena Voloshina of IFC said they have invested $2.25bn supporting export of priority goods like agriculture and energy and traders keeping the economy buoyant, EBRD likewise providing funds to National Bank of Ukraine and other banks to disperse to SME’s and capital infrastructure projects.

Alex Petrov from McKinsey outlined the strong position of the banking sector but the sector has great growth potential as areas such as Insurance, Private equity, risk management, pensions, commodity hedging and Forex, but that what the banks can focus on for growth are scale, efficiency and AI.

Privatisation for some banks is imminent and the panel with EBRD, IFC, Sense and Privat bank, suggested that deals are in discussion. Key considerations and opportunities are the integration and internationalisation of Ukrainian banks into EU and International banking systems, and adoption and acceleration of digitisation, transparency of information (Sigma 7’s role) , due diligence and adherence to international standards, and the preparedness and political judgement of politicians and bankers as to what ‘Fair Value is and the gap between Ukraine expectations and what the market is prepared to pay for.

PRIVAT Bank made the point that despite the internationalisation of the banks, there was a call to retain a strong local element such that the public can access services locally and retain a sense of Ukrainian identity and trust. Sigma 7 added the importance of transparent information, strong cyber capabilities and protection to derisk banks, while using AI for analytics, statistics and input to legal data. NBU offered insights into an increasingly diverse workforce, with over 25% of non exc directors are women, due to increase to 33% in 2026. Matching international standards. EBRDs Francis Malige suggested that The Government could retain shares in the state banks, and release them as their value grew, rather than making full privatisation, to realise best value.

Overall, the banking conversation has moved from resilience and survival to opportunity and growth.