PrivatBank

Largest Ukrainian commercial bank

PrivatBank
Banks, head office in Dnipro, 2010
Company typePublic joint-stock company
IndustryBanking, investment
Founded1992
Headquarters
Dnipro
,
Ukraine
Key people
Hanna Samarina[1]
ServicesFinancial services
RevenueIncrease₴ 18.910 billion (2013)[2]
Net income
Increase₴1.307 billion (2013)[2]
OwnerGovernment of Ukraine[3]
Number of employees
30,000
SubsidiariesAS PrivatBank (Latvia)
AS PrivatBank (Portugal)
AS PrivatBank (Italia)
PrivatBank IBU (Cyprus)
Websiteprivatbank.ua
PrivatBank branch in Lviv, 2015

PrivatBank (Ukrainian: ПриватБанк) is the largest Ukrainian bank in terms of assets and the leader of Ukrainian retail banking market. It was registered on 19 March 1992. PrivatBank was one of the first to introduce modern digital banking and unique technological solutions in Ukraine, allowing customers to use the bank`s services online in the Privat24 app.

PrivatBank has the second-largest network of branches and the largest network of ATMs and terminals among Ukrainian banks. As of July 2022, more than 7,000 ATMs, 11,000 payment terminals and more than 250,000 POS terminals are operating in the network. The national banking service network of PrivatBank includes approximately 1,200 branches. PrivatBank is the largest issuer and acquirer of electronic payment means in Ukraine. The Bank owns PrivatMoney (money transfer system), Privat24 and LiqPay (most popular payment services in Ukraine).

PrivatBank was the first in Ukraine to connect Google Pay and Apple Pay payment services.

PrivatBank is one of the systemically important banks in Ukraine. According to the British magazine The Banker, in 2016 "PrivatBank" ranked 16th in the rating of the largest banks in Central and Eastern Europe and 627th in the rating of the top 1000 global banks.[4]

As of 31 December 2021, the final controlling party of the Bank is the State represented by the Cabinet of Ministers of Ukraine.

History

PrivatBank is one of the first private commercial banks established in Ukraine. Decision on PrivatBank establishment was taken at the meeting of its founders on 7 February 1992.

On 19 March 1992, the Bank was registered by the Stateas a commercial bank in the form of a limited liability company. At the very beginning, PrivatBank had only one office and a few computers. PrivatBank was the first in Ukraine to introduce plastic cards and ATMs.

In 1996 PrivatBank became a full member of Visa International (payment system) and launched a large-scale plastic cards issuance.

In 1997 PrivatBank became the first Ukrainian bank to obtain a Thomson BankWatch rating statement (an international rating agency) and became a full member of the Europay payment system.

In 1998 the Bank obtained Fitch IBCA rating statement (an international rating agency).

In 2000 the organizational and legal form of PrivatBank changed: on 6 July, PrivatBank shareholders made a decision to reorganize the Bank from a limited liability company to a closed joint-stock company. The Charter of the Closed Joint-Stock Company Commercial Bank "PrivatBank" was registered on 4 September 2000.

The launch of the Privat24 project was a significant event in the Ukrainian banking system in 2001. Customers were able to manage their accounts online, make regular payments, transfer funds, etc.

In February 2002, PrivatBank emitted its millionth plastic card.

In 2003, the Western Union system recognized PrivatBank as the best bank in terms of customer service quality. The Bank also obtained the STP Excellence Award from Deutsche Bank, which confirmed the professionalism of PrivatBank in international settlements.

In 2009, the Bank changed its organizational and legal form to a public joint-stock company.

In June 2018, the Bank changed its organizational and legal form from a public joint-stock company to a joint-stock company.

Nationalisation

On December 18, 2016, the Deposit Guarantee Fund (DGF) appointed a temporary administrator to manage the activities of PJSC CB "PrivatBank" in accordance with the decision of the National Bank to classify the Bank as insolvent. On the same day, the Government of Ukraine decided to become the sole shareholder of the Bank through the Ministry of Finance.

On December 19-21, 2016, in accordance with the provisions of the Law of Ukraine “On the Deposit Guarantee System”, the DGF dismissed the Bank's Management and Supervisory Board and was solely responsible for managing the Bank's activities during these three days. The DGF recognized the impairment of loans and advances to customers in the amount of UAH 155,764 million and converted UAH 10,934 million of customer funds, UAH 10,721 million of issued Eurobonds and UAH 7,783 million of subordinated debt into authorized capital of the Bank (‘bail in’). On December 21, 2016, after the bail in, the Bank's shares were sold for UAH 1 to the Ministry of Finance of Ukraine. In December 2016, the Ministry of Finance decided to increase the authorized capital of the Bank by UAH 116,800 million and by further UAH 38,565 million in June 2017.

Nowadays, the State is the only shareholder of the Bank, that owns 100% of the shares of the authorized capital. The functions of managing the corporate rights of the State in the Bank are carried out by the Cabinet of Ministers of Ukraine, which also performs functions of the Supreme body of the Bank.

Customers

The Bank is a universal Bank that focuses on the retail segment, actively promoting services for small and medium businesses and selectively working in the corporate sector.

There are more than 25 million people have used the services of PrivatBank at least once in their lives, which is in Ukraine. Almost 19 million Ukrainians regularly use the services of PrivatBank, and there are currently 15 million customers of Privat24 digital banking.

The majority of corporate customers are small- and medium-sized enterprises. Special attention is paid to the service of network corporations.

The sectoral characteristics of the Bank's customer base show that a large part comprises trade and commercial enterprises. A significant share of corporate customers are enterprises in the food, transport, agricultural, and construction industries.

History of innovations

Debit card issued by PrivatBank

PrivatBank is known for its innovations. In 1999, the Bank launched SMS-banking, and in 2000, it introduced dynamic one-time OTP passwords by linking the card to a mobile phone number.

In 2001, PrivatBank launched the Privat24 digital banking system. As of June 2022, more than 15 million people use the Privat24 digital banking system.

And in 2002, the Bank introduced electronic document management.

Subsequently, PrivatBank was the first in the world to introduce P2P transfers between cards on the Internet and began mass emission of instant cards. In 2005, the Bank emitted a millionth credit plastic card.

Beginning from 2004, PrivatBank has started to make international money transfers to Ukraine using the PrivatMoney payment system.

In 2008, PrivatBank created the first iPhone application in Eastern Europe – iPay, and in 2010, PrivatBank launched mobile payment terminals.

2012 was the year of the introduction of contactless cash withdrawal via ATMs using a smartphone and a QR code.

And in 2015, PrivatBank launched the technology of instant payment via QR code.

In 2016, Visa and PrivatBank announced the launch of the Visa Token Service in Ukraine, which replaces confidential payment card information with a unique digital identifier which is a token.

The next two years were favorable for smartphone owners: in 2017, PrivatBank brought Android Pay (now Google Pay) to Ukraine, and in 2018 – Apple Pay.

2019 was marked in the history of innovations by the updated Privat24. Beyond that, FacePay24 technology – payment by face – became available to bank customers for the first time in Ukraine. The Bank also implemented a number of digital services:

In 2020, PrivatBank launched the "Money at the cash register" service that allows to receive cash at store cash registers. Besides, the Bank has the first biometric POS terminals in Ukraine.

Moreover, government services became available to customers:

  • conclusion of gas supply contracts with Naftogaz by means of Privat24;
  • identity verification and account opening in PrivatBank using digital documents in the Diia application.

In 2021, the Bank opened the first Concept Store in Ukraine – a fully digital office in Kyiv, which is informally called the branch of the future.

Main financial indicators

PrivatBank earned a profit of ₴35.050 billion according to the official data of the National Bank of Ukraine in 2021.

Below is information on the Bank's equity, assets, and net profit for the past 15 years. More detailed financial indicators of the Bank can be found on the Bank's website in the section About the Bank – Financial reporting.

Year Own capital, UAH billion

(at the year-end)

Total assets, UAH billion

(at the year-end)

Net profit, UAH million

(in a year)

2021 376577 21,212,000 (as of September)
2020 334570 24302.000
2019 281637 32609.000
2018 256100 12,520.000
2017 25.607 259.061 - 22,965.913
2016 12.664 220.017 - 135,928.838
2015 27.487 264.886 216.121
2014 22.696 204.585 749.036
2013 20.311 214.490 1,873.391
2012 18.300 172.428 1,532.760
2011 16.746 145.118 1,425.816
2010 11.879 113.437 1,370.179
2009 10.270 86.066 1,050.489
2008 8.195 80.165 1,291.776
2007 5.388 56.211 1,534.162
2006 3.288 33.777 506.208
2005 2.272 22.058 475.654
2004 1.465 14.713 164.842
2003 0.955 9.842 60.549
2002 0.549 6.811 150.879

Ownership structure

On 1 January 2022, the Bank's shareholders are (according to the final aggregate share):

Shareowner Percentage of shares
The State is represented by the Cabinet of Ministers of Ukraine 100%

See also

  • flagUkraine portal
  • iconBanks portal

References

  1. ^ (in Ukrainian) Headless Privatbank: what threatens a bank without a manager and how to appoint hi Archived 28 April 2021 at the Wayback Machine, Ekonomisha Pravda (28 April 2021)
  2. ^ a b "PrivatBank investor review". PrivatBank. 2014. Archived from the original on 21 March 2017. Retrieved 23 January 2018.
  3. ^ "ПАТ "Приватбанк" переходить у стовідсоткову власність держави" (in Ukrainian). Archived from the original on 19 December 2016. Retrieved 18 December 2016.
  4. ^ "On December 18th, 2016 a new history of PrivatBank began". en.privatbank.ua. Retrieved 11 January 2024.

External links

Wikimedia Commons has media related to PrivatBank.
  • Official website (in English)
  • ATMs, payment terminals, departments of PrivatBank on the map (in Ukrainian)