Bankers flag top dangers facing Ukraine’s financial system
Photo: Bankers named the biggest risks for Ukraine's financial sector (bank.gov.ua)
The National Bank of Ukraine has published the results of a new survey on systemic risks. Financial market participants note new threats.
Russia's full-scale invasion remains the main source of systemic risks in Ukraine's financial sector. The risk of fraud and cyber threats has increased significantly since November 2024 (+4 positions) and ranks second among the biggest threats.
For 3 surveys in a row, human capital quality risks in the financial sector have been among the top five sources of risk (+1 position since November 2024).
Other major threats included risks related to the activities of law enforcement agencies and the judicial system (-2 positions) and the dynamics of foreign capital inflows (+3 positions).
According to respondents, the role of risks related to the overall level of corruption, the quality of legislation, and the political and social situation in the country has weakened.
According to financial institutions, the risks of current and expected inflation have increased significantly and are now among the top ten sources of risk. The risks of competition, exchange rate dynamics, and state economic policy, according to respondents, are at the bottom of the list in terms of importance.
War and cyber threats: bankers name the biggest risks to Ukraine's financial sector
The survey was conducted from May 6 to May 21, 2025. It was attended by the heads of 22 banks, ten insurance companies, and two investment companies. The final results were not weighted by the size of the bank/company or their market share—all responses were given equal weight. The results presented are based on the responses received from respondents and may not coincide with the National Bank of Ukraine's assessment of the risks to the financial system.
A rapid end to active hostilities in Ukraine is assessed as an unlikely risk for the NBU's updated macro forecast for April 2025. Instead, there are high risks of escalation of hostilities and further destruction of production facilities.
The IMF has updated its baseline scenario, according to which Russia's war against Ukraine will end at the end of 2025. This scenario envisages Ukraine's economy growing by 2-3% in 2025 and accelerating to 4.5% in 2026.
