Bank-centric nature of the financial system of Ukraine: analysis of the current situation

  • Received August 14, 2020;
    Accepted September 30, 2020;
    Published October 7, 2020
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/bbs.15(3).2020.16
  • Article Info
    Volume 15 2020, Issue #3, pp. 184-198
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The formation and functioning of the country’s financial system depend on many factors, both endogenous and exogenous. The economic system of a country, as a higher-order system in relation to the financial one, underlies the development of the financial system model. The existing model of the financial system becomes significant in the context of its impact on economic processes in the country. The main purpose of the empirical analysis is to confirm the thesis about the signs of the bank-centricity of the Ukrainian financial market. The share of assets of financial intermediaries in GDP is determined, which indicates a significant decrease in the share of assets of all financial intermediaries in Ukraine. Analysis of the loan-to-deposit ratio in the banking system of Ukraine shows that the deposit base was far smaller than the size of loans throughout the analyzed period. Analysis of non-performing loans by economic sectors shows that the largest share of NPLs is formed in the corporate sector of the economy. Analysis of the structure of banks’ assets, taking into account their owners, shows that at the end of the analyzed period the share of state-owned banks’ assets increased significantly. Thus, having analyzed the functioning of the banking system of Ukraine, one can conclude about the bank-centric nature of Ukraine’s financial system.

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    • Figure 1. Share of financial intermediaries’ assets in Ukraine’s GDP
    • Figure 2. The relationship between the income level in the country and the share of bank assets in GDP
    • Figure 3. Dynamics of loans and deposits in the Ukrainian banking system
    • Figure 4. Dynamics of rates on deposits and loans and operating profitability of economic entities
    • Figure 5. Structure of deposits and loans by economic sectors, the averaged 2007–2019 value
    • Figure 6. Dynamics of integrated indices of structural changes by sectors of the economy
    • Figure 7. Dynamics of the structure of deposits and loans by currency
    • Figure 8. Dynamics of integrated indices of structural changes (Gatev coefficient) in terms of currencies
    • Figure 9. Dynamics of NPLs by sectors of the Ukrainian economy
    • Figure 10. Dynamics of the number of banks in Ukraine
    • Figure 11. Indicators of the asset structure of Ukrainian banks
    • Figure 12. Dynamics of NPLs in terms of bank groups on the basis of ownership
    • Conceptualization
      Serhiy Frolov, Fathi Shukairi
    • Methodology
      Serhiy Frolov
    • Project administration
      Serhiy Frolov, Fathi Shukairi
    • Validation
      Serhiy Frolov
    • Supervision
      Serhiy Frolov
    • Writing – original draft
      Serhiy Frolov, Fathi Shukairi
    • Writing – review & editing
      Serhiy Frolov, Fathi Shukairi
    • Data curation
      Fathi Shukairi
    • Formal Analysis
      Fathi Shukairi
    • Visualization
      Fathi Shukairi