Ukraine may decide on additional taxation of banks even this year – economist

The relevant statement was made by Univer Investment Group President Taras Kozak in a commentary to Ukrinform.

The economist praised the results of the domestic banking system in the first quarter of 2025. At the same time, in his words, it is not so much about the merits of banks as about the opportunities for passive income that arose due to the current circumstances.

“The general conclusion, in simple words, is that banks are now ‘in clover’. Primarily, thanks to the high key policy rate. Last year, it was gradually decreasing, from 15% to 13.5%. This year, the National Bank has raised it by 2% to 15.5%. This allows [bank] institutions, first of all, to generate huge income (about 15% per annum) through the NBU’s deposit certificates. The second source is domestic government bonds, whose yield also increased: on average, 16% per annum can be received from ordinary government securities, and slightly less – from reserve ones. Therefore, banks have ‘no appetite for risks’,” Kozak told.

According to him, this makes banks disinterested in the development of real sector lending. Even if such loans are issued, banks still provide a significant portion of corporate lending by participating in government-funded preferential programmes, co-financing projects with the government, and grant programmes from international partners. Mortgage lending remains at a low level, and retail loans are provided at higher rates.

“The only thing that limits excess profits is that the state has been imposing a 50% profit tax on banks for two years in a row. At the end of this year, the state is likely to decide so again,” Kozak added.

In accordance with his forecast, as long as the yield on deposit certificates and domestic government bonds remains high, there is no hope that the main sources of bank profits will change and the volume of lending to the economy will increase significantly.