№ 10/2015

Fìnansi Ukr. 2015 (10): 77–89

MARKET OF FINANCIAL SERVICES

PZVMOYQRFG naPKYMzuBtJ CNMfhvclkeFozR¹, LYUBICH Oleksandr ²

¹KAXGWfqlTR, Research ID : http://www.researcherid.com/rid/L-2372-2018
OrcID ID : https://orcid.org/0000-0001-8388-6721
²SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-9339-4242

Presence of foreign banks of EU member states in Ukraine

Foreign banks form the core of national banking systems in Central and Eastern Europe. This is a natural tendency also for Ukraine, particularly in connection with the course of European integration. However, comparing to other neighboring countries, Ukrainian financial market is in a state less attractive position, considering the potential growth and risk profile. Banks originated from Western, Southern and Central Europe remarkably present in Ukraine. Strategies regarding the presence of European banks in Ukraine diverse and include exit from the market, holding a share of the market and curtailing activity. From the perspective of financial stability, European banks are more capitalized and have greater capacity for absorption of losses than other Ukrainian banks, bring in advanced technologies (marketing, management and information) in banking business, promote healthy competition and innovations in banking sector. On the other hand, foreign banks may pose a threat to the financial security of the state, if they pick the most profitable segments of clientele (wealthy citizens, powerful, export-oriented enterprises), and in case of deterioration of the business environment – leave the market. The level of efficiency of activity of European banks in Ukraine in 2014-2015 crisis significantly decreased, which stimulates the parent companies of these banks to exit from the investment by closing or selling business, narrowing by localization of activity and conservative growth.

Keywords:banks, banking system, foreign-owned banks, capitalization of banks, competition, concentration of the banking sector

JEL: F21, F33, G32

pZVmOYqrfG n. C. Presence of foreign banks of EU member states in Ukraine / n. C. pZVmOYqrfG, O. . Lyubich // Фінанси України. - 2015. - № 10. - C. 77-89.

Article original in Ukrainian (pp. 77 - 89)

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