The number of bank branches in Ukraine is declining. The availability of banking services is also

21 January 12:49

As of the beginning of 2025, there were 61 banks operating in Ukraine with 5,011 structural units, i.e. bank branches. Last year, the number of bank branches decreased by 127 units (minus 2.5%). This was reported by Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, citing data from the National Bank, Komersant ukrainskyi reports.

Oschadbank (minus 32 branches), Privatbank (minus 25), and Credit Agricole Bank (minus 14) have reduced their networks the most over the year.

At the same time, Oschadbank, which had a network of 1150 branches in 2024, remained the market leader in terms of the number of structural units. Oschadbank and Privatbank (1107 branches) accounted for 45% of the total network of bank branches.

At the same time, every 5th bank increased its network by opening new branches. The largest increase in the number of the latter in 2024 was in Accordbank (plus 6 branches).

Why many banks are still closing branches

“The trend of reducing the existing structural units of banks has been going on since 2009,” Danylo Hetmantsev reminds. According to him, this is primarily due to two banking crises – 2008-2009 and 2014-2016, as well as network optimization by state-owned banks, the development of banking FinTech technologies: the spread of Internet banking, the emergence of neo-banks, new payment systems, and the deepening of remote verification systems such as BankID.

As in 2014-2015, the war also led to the downsizing and suspension of banking units. Compared to the beginning of 2022, the operating banking network of branches has decreased by a quarter (minus 1674 branches).

Danylo Hetmantsev reminds that the decision to optimize structural branches is made by the governing bodies and shareholders of banks. In the frontline regions, this is an issue motivated primarily by the safety of bank employees and customers. However, in addition to the areas where active hostilities are taking place, the low and below-average penetration of bank branches in most regions of Western Ukraine (except for Lviv region) is noteworthy, which may lead to a deterioration in financial inclusion.

What is financial inclusion?

A few years ago, the National Bank called financial inclusion a driver of economic growth. In Ukraine, however, this indicator is insufficient. In particular, according to the World Bank, the level of financial inclusion – the coverage of the Ukrainian population with financial services – was 84% in 2021, which is 11 percentage points less than the target 95%. And there is no reason to hope that the situation will change for the better – unfortunately, the country is at war.

In fact, financial inclusion is about accessibility and equality of opportunities for consumers of financial services.

In this regard, the NBU pinned its hopes on the emergence of a new type of banking institution in the Ukrainian financial market – a financial inclusion bank. Such banks would be granted a limited banking license, but they would help solve the issue of access to financial services for households and small businesses in remote, sparsely populated areas, in areas close to military operations, and in liberated territories.

A limited banking license stipulates that a joint-stock company that receives the status of a banking financial institution must comply with all regulations and fulfill the NBU’s licensing requirements. At the same time, to ensure a focus on private individuals and small businesses, such banks would be limited in conducting transactions with other customer segments (medium and large businesses) and capital market operations. They would also have restrictions on the total amount of credit that can be provided to one borrower.

The adoption of the relevant law should have accelerated the process of financial inclusion and legalized the emergence of such banks. But it hasn’t happened yet.

What about the law on financial inclusion?

The draft law No. 12044 “On Amendments to Certain Laws of Ukraine on the Development of Financial Inclusion in Ukraine” was registered in the Parliament in September last year. It was drafted pursuant to the Memorandum with the IMF and was included in the agenda of the Verkhovna Rada in early December. At the time, the bill was missing just a few votes to continue working on it.

At the time, Danylo Hetmantsev called the parliament’s decision strange, because without the law, people and businesses in the frontline regions would not be able to receive banking services.

“This happens very rarely, but there are some things that, despite my sixth year in politics, are hard for me to understand. These include the failure of the draft law on financial inclusion. And people who cannot open an account in a village now will not be able to do so in the future. Such a strange decision was made by the parliament…” he wrote in his Telegram channel.

Now, the Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, Danylo Hetmantsev, is once again talking about the importance of returning to the consideration and adoption of this law.

Василевич Сергій
Editor