Taxes, Superprofits, and Strategy: How the Banking Sector Is Changing
The banking system of Ukraine is the main donor of the state budget in wartime conditions. In 2024, banks earned a pre-tax profit of 186.8 billion UAH, and the corporate income tax amounted to 95.9 billion UAH, or 51% of the total. After paying taxes, the net profit remained at 90.9 billion UAH. For comparison: in 2022, the tax share was 25%, and in 2023 it was 48%. All these figures reflect state policies that have significantly altered the sources of bank income and the rules of taxation.
In the conditions of full-scale war, the main sources of bank profits are NBU deposit certificates and government bonds issued by the Ministry of Finance. These are risk-free instruments that allow banks to earn significant sums from interest payments made by the state. In fact, banks receive superprofits without taking risks, while becoming passive in lending to the real economy. The state stimulates this model by tying up hryvnia liquidity and offering attractive conditions for placing funds in government securities.
In 2023–2024, the government introduced an increased income tax rate of 50% for banks, while other sectors were taxed at 18%. The official justification was to compensate for “superprofits” earned due to state policies. In 2025, the rate was reduced to 25%, but banks were allowed to deduct past losses to reduce their tax base. However, in the first half of 2025, there was no significant decrease in tax payments banks remain a key source of budget revenues.
The majority of profit is generated by state-owned banks, primarily PrivatBank. In the first six months of 2025, it earned 34.88 billion UAH before taxes and paid 11.09 billion UAH in profit tax. Among private banks, leaders include PUMB and Universal Bank (monobank); among foreign banks Raiffeisen Bank. Overall, the “TOP 100 Private Taxpayers” ranking by Delo.ua is dominated by state and systemic banks, along with several insurance companies.
Impact of the Extra Profit Tax
The increased tax rate was a logical response to rising bank income, but it presents risks. The National Bank of Ukraine (NBU) warns: “We now consider this initiative dangerous. It undermines trust in the tax system and will have serious negative consequences not only for banks,” says NBU Governor Andriy Pyshnyi.
Key arguments of the NBU:
- Banks use profits to build capital reserves and meet future regulatory requirements as part of EU integration.
- Increased tax rates “punish” the most transparent sector, which provides a third of all tax revenue to the budget.
- Lower margins may reduce banks’ willingness to lend and invest in the real sector.
In 2026, the government plans to reinstate the 50% tax rate for banks and prohibit the deduction of previous losses from the tax base. The bill has already passed the first reading, although parliamentary experts warn that the fiscal effect might be overstated and that the long-term consequences for financial stability could be significant.
Market Perspective
Banks acknowledge that tax burdens are a major factor shaping their development strategies. “I would note the government’s intention to reintroduce a 50% tax rate instead of the 25% enacted for this year. This is a significant strain on bank capital which, given external threats and internal challenges, could become a serious problem. Not all banks will handle this easily, and lending could stop,” comments PUMB Deputy Chairman Artur Zahorodnikov.
Yet banks are planning for growth. “Our goal by 2028 is to restore the loan portfolio to the pre-war level in euro equivalent, which implies a growth of about 20% annually,” says Credit Agricole Bank CFO Vitaliy Kucher.
The Ukrainian banking sector remains the main donor of the budget and a pillar of financial stability during the war. However, the policy of taxing superprofits has two sides: it offers immediate fiscal benefits but risks undermining the long-term sustainability of the banking system. The balance between tax initiatives and lending stimulus will determine whether the banking sector can fulfill its crucial role in rebuilding the economy after victory.
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