IFC: The Privatization of Ukrgasbank and Sense Bank Will Open New Opportunities for Investors

The transparent privatization of state banks Ukrgasbank and Sense Bank could be a decisive factor in bringing large international financial organizations back to investing in Ukraine’s banking sector. Investors are currently exercising caution regarding direct capital investments in banks due to difficulties in predicting exits from such investments, especially in a state of war. This was emphasized by Olena Voloshyna, head of the International Finance Corporation (IFC) office in Ukraine, during the Forbes Banker forum.

This is reported by AgroReview

Support for Small and Medium Enterprises

IFC views Ukrainian banks as a key link for financing small and medium enterprises (SMEs). Currently, the corporation supports the sector through two main instruments: financing export-import operations and a risk-sharing facility, which has already been implemented in cooperation with five banks and one leasing company. At the same time, regarding direct investments in capital, MFIs have become significantly more cautious, as it is difficult to predict exits from such projects in unstable conditions.

She emphasized that IFC considers Ukrainian banks as a key channel for financing small and medium enterprises (SMEs). Currently, the corporation supports the sector with two main instruments: financing export-import operations and a risk-sharing facility, which is already working with five banks and one leasing company. However, regarding direct investments in capital (entry into shareholders), MFIs have become much more cautious due to the difficulties in predicting exits from such investments in wartime conditions.

Privatization as a Condition for Attracting Investments

According to Olena Voloshyna, transparent privatization of state banks and the continuation of corporate governance reforms could serve as an effective stimulus for rekindling the interest of international investors. She reminded that MFIs have a successful track record of participating in the capital of Ukrainian banks: at one time, IFC, EBRD, and the Dutch bank MeesPierson jointly owned 50% of PUMB shares.

The need for privatization is linked not only to the desire to attract new investors but also to fulfilling Ukraine’s obligations under the Extended Fund Facility (EFF) program with the IMF. The government must reduce the state’s share in the banking sector, which has increased to 54.4% during the war. Currently, seven banks are under state control, which significantly affects market competition and the prospects for the industry’s development.