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Cabinet approves development strategy of Oschadbank for 2021-2024

KYIV. Oct 12 (Interfax-Ukraine) – The Cabinet of Ministers at an extraordinary meeting approved the development strategy of state-controlled Oschadbank for 2021-2024, according to which the bank will strive to achieve a projected net profit of UAH 4.2 billion, a return on capital of about 15% and a cost-to-income ratio at the level less than 65%, the Finance Ministry’s press service said.

"Approval of Oschadbank’s development strategy will ensure its proper functioning, promote effective management, protect the rights of depositors, creditors and the state as a shareholder. One of the government’s priorities is to reform the state banking sector," Deputy Finance Minister for European Integration Yuriy Drahanchuk said.

According to the report, Oschadbank will regulate the level of non-performing assets by 2024 and gradually reduce their share to 10%.

The strategy also stipulates that Oschadbank will reduce the level of operating expenses and revise capital expenditures by optimizing the network and centralizing operations.

In addition, the bank is supposed to join the Deposit Guarantee Fund, which in the future will ensure the entry of international financial organizations into the capital of the financial institution.

The strategy provides for the bank’s business model as a universal financial institution, which strengthens its position in retail lending and commission products, retains its leading positions in the segments of corporate business and micro, small and medium-sized businesses, with a decrease in the share of state-owned enterprises.

In addition, the bank’s operating model is driving the development of its digital product line, including industry-specific products that will be delivered through digital channels and automated processes.

It is indicated that one of the main components of the bank is maintaining financial stability, in particular, operating efficiency and a constant level of profitability of Oschadbank.