FEATURES OF THE FUNCTIONING OF STATE BANKS IN THE UKRAINIAN BANKING SERVICES MARKET

Abstract

The article examines the peculiarities of the functioning of Ukrainian state-owned banks in martial law conditions and global financial instability. Attention is focused on the strategic role of state-owned banks in ensuring financial security and supporting the country’s economy in crisis conditions. It highlights the transformation of their role from traditional intermediaries to instruments of crisis management and stabilisation of the national economy. It analyses structural changes in the banking sector of Ukraine, particularly the nationalisation of leading financial institutions, and identifies the consequences of asset concentration in the public sector. The ability of state-owned banks to perform a countercyclical function in times of economic turmoil by supporting lending to businesses and the population, even at increased risks, is emphasised. It is stressed that, at the same time, the high share of state participation in the banking sector creates several challenges: the threat of monopolisation, restrictions on competition and the risk of political influence on credit policy. Particular attention is paid to the problem of non-performing loans (NPLs), the trend towards their reduction and the impact on the loan portfolio’s quality.

The article substantiates the need to reform and optimise the activities of state-owned banks, considering international experience and current challenges, and proposes ways to improve the activities of state-owned banks in Ukraine during the war. It concludes that these institutions can become drivers of Ukraine’s post-war economic recovery, provided their work is effectively coordinated with the government and regulators, modern management approaches are implemented, and international banking regulation standards are gradually adopted.