PrivatBank Reports Record Profits, But Windfall Tax Eats Half

Ukraine’s largest state-owned bank, PrivatBank, reported Hr.80 billion ($1.9 billion) in sales and Hr.40.1 ($955.7 million) in net profits during the 12 months of 2024. 

The volumes comprise 43% of the total profits of Ukraine’s banking system, PrivatBank Chief Financial Officer (CFO) Larisa Chernyshova said during a briefing in the bank’s headquarters in Kyiv on Tuesday. 

Half of the profits will be readdressed to the state as PrivatBank needs to pay a 50% windfall tax on its profits. 

An extra Hr.32.1 billion ($765 million) will be paid in dividends to the state. 

Ukraine’s deputy minister of finance Yuriy Draganchuk reacted to the news in a Finance Ministry’s press release: 

“PrivatBank is a reliable financial support for the state, because in wartime, its activities not only contribute to the stability of the banking sector, but also directly support the financing of defense and social programs. This example of effective management of a state bank is a strategic guideline for the development of the financial system of Ukraine,” the press release says, quoting the deputy minister. 

Since the beginning of the year, the bank’s net loan portfolio exceeded Hr.112 billion ($2.7 billion), increasing by Hr.20.7 billion ($492 billion) in 2024, Chernyshova said during a briefing. 

This may partly be explained by PrivatBank’s launch of loans for large businesses. Kyiv Post wrote about the impacts of the market move last year. 

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Since its inception, PrivatBank has provided relatively small-scale financial services, focusing on card facilities for individuals and loans to small and medium-sized enterprises. But in the summer of 2024, the bank expanded its business to the provision of credits for larger enterprises.

PrivatBank is Ukraine’s largest bank with 18.3 million clients – equivalent to the total population of the Netherlands. 

The total assets of the bank are Hr. 761.7 billion ($18.1 billion)