The investment attractiveness of the banking sector depends on the state of Ukraine’s economy says Sergii Naumov, Chairman of the Management Board of Oschadbank. The extent to which the banking industry will develop in Ukraine, and whether five years will be enough for positive change, depends on the readiness to build a strong economy and a digital, constitutional state without corruption, highhanded law enforcement authorities, and bureaucratic hurdles.
The moderator was Yuriy Fedoriv, Director, Investments and Capital Markets, Head of Financial Services and Restructuring, KPMG in Ukraine.
How do you assess the situation in the banking market, such as the corporate sector, small and medium-sized enterprises, and the retail service segment? How is our economy doing in general today?
In my opinion, this crisis has not hit our economy and the banking sector as hard as expected. It is safe to say that the transformation of the banking sector over the past five to six years has made it possible for the industry to overcome the crisis quite easily. Of course, during the crisis, many businesses experienced a decline in business activity and, as a result, the growth rate for many companies has been falling. However, we now see cautious optimism among businesses and signs of economic recovery. Consumer demand is increasing, there is a slight industry growth of 2.2 percent, and some growth in agriculture. The retail segment increased by 14 percent since the beginning of the year. The construction industry has seen a slowdown, though this can be remedied by increased funding for the ‘Large Construction’ programme. The logistics industry has prospects and remains interesting for potential investors. This trend contributes to gradual credit growth recovery in the banking sector; up 1.3 percent in the first five months of 2021, while the deposit portfolio grew by 2.8 percent. The pace is slow because it is unclear how the economy will recover further. Accordingly, businesses are in no hurry to invest and prefer to keep their money in accounts, mainly in foreign currency.
As far as Oschadbank is concerned, we see the demand for loans and our portfolio is growing due to SME and retail lending. These positive signals give us hope that the economy will continue to grow in the future.