Banking & Finance - Annual Review 2013

Q: COULD YOU PROVIDE A BRIEF OVERVIEW OF RECENT BANKING AND FINANCE ACTIVITY IN UKRAINE? ARE BANKS IN GENERAL DEMONSTRATING A STRONG APPETITE TO LEND, PARTICULARLY IN SUPPORT OF CORPORATE TRANSACTIONS?

OLSHANSKY: In recent years, the growth of the Ukrainian banking sector has slowed considerably. Pre-financial crisis, many international banking groups entered the Ukrainian market, mostly by purchasing majority stakes in local banks. That trend has now reversed, and Western banks are selling their Ukrainian assets en masse. At the same time, a number of Russian banks are maintaining a strong presence in the market via their subsidiaries. Lending growth rates have never quite recovered after the crisis. According to the National Bank of Ukraine (NBU), the Ukrainian central bank, the principal amount of loans extended to businesses as at 1 January 2013 was only 5 percent higher compared to 1 January 2012. The principal amount of long-term loans to businesses