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State-owned banks continue to increase their market share during war
KYIV. Aug 16 (Interfax-Ukraine) – The share of state-owned banks in the total assets of the banking system in the first half of 2022 increased from 49.8% to 53.4%, including by 1.7 percentage points (p.p.) in the second quarter, according to a review of the banking sector, published by the National Bank.
According to it, of the four state-owned banks, PrivatBank makes the main contribution, which increased its market share from 24.7% to 27% in the first half of the year, including by 1.2 percentage points in the second quarter.
As reported, after the banking crisis of 2014-2016, the nationalization of PrivatBank and the additional capitalization of state-owned banks, while many private banks were withdrawn from the market, the share of state-owned banks in the market increased significantly, but began to decline in subsequent years. In particular, in 2020-2021 it decreased from 60.4% to 49.8%, including that of PrivatBank – from 27.9% to 24.7%.
The increase in the share of banks during the war is mainly due to a decrease in the share of foreign groups, which fell from 30.1% to 27.2% in six months, while that of private banks – from 20.2% to 19.4%. At the same time, in the second quarter, private banks reduced their share faster – by 1.2 percentage points, while foreign banks – by 0.5 percentage points.
The same situation is observed in relation to net assets: the share of state-owned banks increased from 46.7% to 50% in the first half of the year, including PrivatBank – from 19.8% to 22.1%. The second quarter saw an increase of 2.2 percentage points and 1.6 p.p. respectively.
The share of state-owned banks in attracting deposits is even greater: if in 2019-2021 it decreased from 63.5% to 55.5%, then in six months of this year it increased to 59.3%, including PrivatBank – from 31.2% % to 35.4%. The second quarter saw an increase of 3.4 p.p. and 2.6 p.p. respectively.
Over the past six months, the share of deposits in foreign banks has decreased from 25% to 22.9%, in private banks – from 19.5% to 17.8%, including in the second quarter by 1.6 percentage points and 1.8 p.p. respectively.
In general, the NBU notes an increase in market concentration: the share of assets of the ten largest banks in total assets has increased from 73.8% to 77.6% since the beginning of the war.
