As a result, banking penetration increased in Ukraine, but remains far below that of peers. Assets are mainly concentrated in state-owned banks which account for four of the Top-5 banks. Currently, they hold less than half of net assets compared to 55% in 2019 indicating a much-welcome decline in the state share within the sector.
The pandemic did not put pressure on NPLs, as many observers expected. On the contrary, a strong decline of the non-performing loan (NPL) share in the sector from 58% in June 2017 to 33% in September 2021 was recorded. After stress tests were postponed in 2020 due to the pandemic, the recent one conducted in autumn 2021 showed that the sector is overall stable, with a solid and rising capital adequacy ratio, which is high even in international comparison. Beyond the pandemic, increasing demand and international com-petition in digital finance is a challenge for the sector. Successful forerunners demonstrate how to deal with the transformation.