Efficiency of State Banks in the Economy of Poland and Ukraine

Sergey Yakubovskiy (), Giorgio Dominese (), Artem Piatkov () and Tetiana Rodionova ()

Journal Transition Studies Review, 2022, vol. 29, issue 1, 3-26

Abstract: The purpose of the research is to analyze and compare the efficiency of public, private and foreign banks in Poland and Ukraine for the period 2014-2020. To achieve the goal of the study, a quantitative approach based on the calculation of financial ratios such as net interest margin (NIM), average return on equity (ROAE), average return on assets (ROAA) and cost-to-income ratio (CIR) is used. The best performance indicators and the best efficiency in terms of criteria such as NIM, ROAE, ROAA and CIR in the period 2014-2019 were demonstrated in Poland by state-owned banking groups; however, in 2020, according to ROAE and ROAA, the best results showed banks with foreign capital (in particular, the banking group BNP Paribas Polska). The private bank Getin Noble was the worst in all evaluation criteria.The largest share of net assets in the banking system of Ukraine, as in Poland, is occupied by state-owned banks, while the share of foreign banks continued to decline, and the share of private banks was the smallest in the banking system. However, the best indicators of NIM, ROAE, ROAA, and CIR in the last three years were demonstrated in Ukraine by foreign banks. The result of the analysis shows that in the crisis situation caused by the COVID-19 pandemic, both in Ukraine and Poland, banks with foreign capital showed the highest efficiency in their activities, and the least - banks fully controlled by national capital.Modeling of the efficiency of state-owned banks in Ukraine showed that state-owned banks are mostly inefficient; this requires their privatization with the mandatory participation of foreign investors.

Keywords: efficiency of the banking system; foreign investors; net interest margin; average return on equity; average return on assets; cost-to-income ratio (search for similar items in EconPapers)
Date: 2022
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