According to the National Bank of Ukraine (NBU), its governor Andriy Pyshnyi, speaking at a monetary policy press briefing, explained why the regulator opposes the introduction of a 50% tax on banks’ profits in 2027.
Higher tax could constrain profitability and capital
Pyshnyi noted that introducing a 50% tax on banks’ profits in 2027 could limit the sector’s profitability, weaken its ability to build capital and restrain lending. Unlike in 2023, when the higher tax was introduced as an exceptional measure, lending has now regained its role as a core business for banks.
The NBU records the longest period of high lending growth rates in the past 15 years, and the level of interest rates on new loans to businesses is lower than pre‑COVID. To support this momentum the regulator emphasises the need to preserve banks’ profits as a source of capital formation.
“The NBU and banks are well aware of the level of their responsibility. And if we are talking about the need to develop lending, we must understand that the foundation for its stable and rapid development is strong capital, and the key source of forming this capital in conditions of a prolonged war is banks’ profits. If we want to continue to support credit expansion and the dynamics of euro‑integration processes, a substantive expert discussion is needed,” Pyshnyi stressed.
Impact on profitability metrics and lending
This year, as a result of the higher tax, the net profit of the banking sector has already fallen by one third year‑on‑year, and net return on capital for the eight months of 2026 fell to 22% (in particular, in non‑state banks — to 16%). Current system profitability is comparable with that of banks in neighbouring EU countries and lower than the pre‑COVID performance of Ukrainian banks.
The return on capital for a number of financial institutions is already below its cost, which calls into question the viability of the banking business and the attractiveness of the sector for investors and for privatisation of state banks. In the event of further profit extraction, even if current profitability is maintained, banks would be able to expand lending at no more than 15–20% per year.
Legislative initiatives and budget figures
The Verkhovna Rada supported at first reading draft law No. 15262, which provides for the extension of the elevated 50% profit tax rate for banks into 2027.
As of 1 October the National Bank updated its forecasted contribution to the state budget for 2027 from the initial 49 billion UAH to 70 billion UAH.
