Banking Sector Resilience Hinges on Economic Resilience - Ukraine’s Recovery Discussed at EBRD Roundtable in London

This was stated by Volodymyr Lavrenchuk, Chairman of the Supervisory Board of Oschadbank, during the 4th Annual Roundtable of the European Bank for Reconstruction and Development (EBRD) on the resilience of Ukraine’s banking sector amid the war, which took place in London on September 15. Yurii Katsion, Chairman of the Management Board, also represented the bank at the event.

“Ukrainian banks have already done a great deal to ensure operational resilience and continue operating amid the war. But a bank alone cannot be resilient – its resilience depends on its customers. Businesses need investment loans, and damaged assets could be restored using financing. Our task is to develop tools that will enable customers to recover and continue their operations in Ukraine,” the banker noted.

According to Volodymyr Lavrenchuk, Ukrainian banks have demonstrated their ability to ensure business continuity amid large-scale challenges throughout the years of full-scale war. The next challenge for the sector is to maintain financial stability – sufficient capital ratios, high-quality loan portfolios, and the ability to continue financing the economy.

Oschadbank regularly assesses the quality of its loan portfolio and the ratio of non-performing loans (NPLs), taking into account the consequences of the war and damage to customers' assets. At the same time, businesses’ willingness to continue operations, take advantage of restructuring opportunities, and secure financing lays the foundation for further support of the economy. The reserves we have built up, our efforts with customers, and their willingness to grow their businesses enable the bank to maintain financial resilience.

“We see that our customers are willing to keep operating in Ukraine. Most of them welcome restructuring, particularly short-term solutions. We therefore feel more optimistic about the outlook. Even given the deterioration in the quality of the loan portfolio, our mission is to keep issuing loans and supporting our customers,” emphasized the Chairman of Oschadbank’s Supervisory Board.

According to Volodymyr Lavrenchuk, further resilience of the Ukrainian economy will largely depend on the capacity of businesses to restore damaged assets and raise funds to continue operations. Companies have the experience, contracts, and people, but they need capital to recover after the destruction. Government and international support programs, as well as new market-based financing instruments, will play a key role here.

“If businesses affected by the war leave the country without being able to resume operations and recover damaged assets, this poses a significant risk,” he noted.

The EBRD’s 4th Annual Roundtable brought together top executives from Ukrainian banks, as well as representatives from the EBRD and the European Commission. Participants discussed macroeconomic trends and the war’s impact on the economy, the resilience of the banking sector and key risks, EBRD support instruments for the financial sector, financing Ukraine’s recovery, and human capital development.

During the meeting, representatives of the Ukrainian banking sector thanked EBRD President Odile Renaud-Basso, EBRD Managing Director and Head of Financial Institutions Business Group Francis Malige, EBRD Director for Financial Institutions in the Western Balkans and Eastern Europe Aleksandra Vukosavljević,  EBRD Associate Director and Senior Banker / Financial Institutions Andrii Smal, and EBRD Deputy Head of Ukraine for Financial Institutions Arthur Poghosyan for their consistent support of the Ukrainian economy and financial sector.

The EBRD is one of the largest institutional investors in Ukraine. Oschadbank has been cooperating with the EBRD since 2016. Since then, the partnership has encompassed trade finance, preparing the bank for privatization, risk-sharing mechanisms, and financing power generation and energy efficiency projects.

Oschadbank will keep doing its utmost to leverage opportunities for cooperation with the EBRD to support Ukrainian businesses, communities, and the country's economy.