Adaptive Modeling of the Economic Development of Banks in Ukraine Under Martial Law (Business Inform)

Summary

• Ukrainian banks' net profit grew from 41,3 млрд грн in 2020 to ~150–160 млрд грн in 2024, driven by income from deposit certificates and domestic state loan bonds.p.5
• The return on equity (ROE) of the Ukrainian banking system reached ~35–45 % in 2024, compared to 19,2 % in 2020.p.5
• Net interest income increased from 83,0 млрд грн in 2020 to >200,0 млрд грн in 2024 due to high interest rates and liquidity.p.5
• The share of demand deposits in bank liabilities increased to ~70,0 % in 2024 from 52,0 % in 2020.p.5
• The Liquidity Coverage Ratio (LCR) increased from ~250 % in 2020 to >350 % in 2024, acting as a buffer against capital outflows.p.5
• The share of non-performing loans (NPL) was ~35,0–37,0 % in 2024, while NPL reserve coverage exceeded >50,0 %.p.5

Key insights

1. Traditional forecasting models relying on stable trends proved ineffective under strategic uncertainty caused by full-scale military conflict.p.2
2. Adaptive modeling shifts the research paradigm from traditional risk management to anti-fragility theory and continuous business model adaptation.p.2
3. Digital transformation has evolved into a critical operational defense mechanism ensuring business survival rather than just a service advantage.p.3
4. The integral economic development index (IRB) is modeled via four sub-indices: financial stability, liquidity, technological resilience, and risk factor.p.5
5. The minimum allowable regulatory capital adequacy ratio (H2) set by the National Bank of Ukraine is 10%.p.6
6. Cybersecurity maturity is evaluated according to NBU methodology on a scale ranging from 1 to 5.p.6
7. An IRB score between 0,75–1,00 corresponds to a high development level recommending expansion and M&A strategies.p.7
8. An IRB score of 0,00–0,24 indicates a critical condition requiring financial sanation or market exit.p.7