FINANCIAL SECTOR OF UKRAINE: TRENDS FUNCTIONING OF THE BANKING AND STOCK MARKETS

Abstract

This article is dedicated to an in-depth examination of the financial sector of Ukraine in the context of a full-scale armed conflict within the country. It is of great relevance and necessity to study the peculiarities of the country’s financial sector in the context of instability. In examining the financial sector of the country, a variety of analytical techniques were employed, including an analytical review, analysis and synthesis, financial and economic analysis, and rating assessment, among others. It is thus evident that the financial sector plays a pivotal role in ensuring the survival of the state and the viability of its business enterprises. This article describes the principal alterations to the financial sector’s operations resulting from the imposition of martial law. In particular, the author presents and characterizes the updated Strategy for the Development of the Financial Sector of Ukraine, as revised by the National Bank of Ukraine. It is evident that the presence of crisis phenomena has contributed to a significant transformation of the country’s financial sector, which is a crucial step in its continued development and adaptation to the evolving realities of its activities. An evaluation of the viability of prospective modifications to the financial sector of Ukraine is reflected in its two principal components: the banking market and the stock market. A review of the banking sector’s performance during wartime indicates that it has remained operational and effective, as evidenced by the following factors: 1) the existence of a significant factor of trust from the citizens of the state; 2) the preservation of the state and level of profitability by the country’s banks; 3) the ability to increase capital for the purpose of lending. The analysis of the top 10 rating of the most reliable banks in Ukraine for 2023 revealed the following: UKRSIBBANK, a French bank, was the highest-ranked institution, followed by Kredobank and Credit Agricole Bank. This rating also included state-owned banks such as PrivatBank and Oschadbank. The study of the functioning of the country’s stock market demonstrates the continued development of this market despite the ongoing conflict, with a notable shift towards the implementation of European best practices. The study revealed that the presence of military aggression and martial law had a somewhat negative impact on the woodworking industry, logistics and transportation services, and energy supply. Nevertheless, an evaluation of the exchange market has revealed that the largest proportion of the overall structure of exchange trading is accounted for by electricity (61,30 %). It has been established that even in the context of significant challenges, regular trading plays a pivotal role in supporting the state’s economy. A considerable number of enterprises rely on this activity to guarantee job security and ensure the timely payment of wages and taxes. The financial sector of Ukraine has demonstrated its resilience in responding to various crises, protecting its citizens and maintaining its continued functionality.