Government endorses decision to update strategic priorities for state-owned banks
On June 30, the Cabinet of Ministers of Ukraine adopted a decision to update the Main (Strategic) Priorities for state-owned banks. The document was drafted by the Ministry of Finance with the involvement of international experts to fulfill Ukraine’s commitments to the IMF and the EU.
The updated version of the Main Priorities is aimed at:
- ensuring the financial stability of state-owned banks and minimizing fiscal risks;
- managing non-performing loans (NPLs) and improving corporate governance;
- gradually reducing the state’s share in the banking sector.
During the period of martial law, the objectives of state-owned banks are defined as financing enterprises in the defense-industrial complex, critical energy infrastructure, the agricultural sector, the processing industry, and frontline regions, as well as providing mortgage loans to ensure citizens have access to housing.
In addition, the updated document provides for:
- updating individual strategies: each state-owned bank must update its own individual strategy by the end of 2026;
- management assessment: to improve the effectiveness of supervisory boards, an annual evaluation of their performance is being introduced;
- handling of non-performing loans: banks must reduce the level of non-performing assets, in particular by selling their top three non-core assets and resolving their top three non-performing loans by the end of 2027;
- privatization plans: the sale of equity stakes in JSB “UKRGASBANK” and JSC “SENSE Bank” to investors is planned. The sale of JSC “PrivatBank” is permitted after the end of martial law.
Furthermore, to ensure a response to risks associated with the unethical conduct of certain independent members of supervisory boards (including integrity and reputational risks), the list of grounds for their dismissal will be expanded, while maintaining the principle of the supervisory boards’ independence from operational interference in their activities.