Invariants of development in the banking sector of Ukraine’s economy
Journal Title: Visnyk Ternopilskoho natsionalnoho ekonomichnoho universytetu - Year 2016, Vol 4, Issue
Abstract
The article analyzes trends of development in the banking sector and the main indica-tors of banks in Ukraine, particularly, the structure of the banking sector, asset formation, the growth rate of loan portfolio, the share of non-performing loans, the spatial structure of foreign capital in Ukraine’s banking system, the funding process, policies and interest rates, prospects and risks in the banking sector. The authors examine the problems in functioning of the banking sector whose influence is growing significantly at the current stage of economic development. For example, in 2014-2015 Ukraine’s economy and its banking sector suffered the deepest crisis since its independence. It is found that the crisis was caused by large-scale structural imbalances and strengthened by the military conflict and annexation of Ukraine’s territories to Russia. Analysis of the domestic banking sector made it possible to highlight the main problems whose solutions will enhance financial stability and reliability of the banking sector. It is concluded that the flows of funds from population and companies were the key factor which increased the liquidity of the banking sector in 2016, while removing restrictions on withdrawals of hryvnia deposits and a significant increase in withdrawal limits on foreign currency deposits have not affected the dynamics of deposits. That revealed a sharp contradiction between an increasing role of individuals’ deposits as a source of banks’ assets, on the one hand, and a decrease in attractiveness of bank deposits as a way to preserve and increase the population’s savings, on the other hand. Banks’ capital has been mostly raised through converting loans from shareholders. Bank lending remains relatively low due to people’s low paying capacity, debt overburden of enterprises and fairly tough credit conditions, failures to restructure loans or to find possible payment delay options etc. It is defined that one of the most important problems of the banking system is a significant devaluation of the hryvnia resulted from the state of the currency market. The analysis of functioning of Ukraine’s banking sector enables to outline its perspectives and determine the invariants for its further development.
Authors and Affiliations
Zoriana Lutsyshyn, Тetiana Frolova, Liubov Lukianenko
Keywords
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