Bankers unconcerned about the Elections

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Ukrainian bankers, for the most part, are not concerned about the presidential campaign's outcome - statements to this effect were made by 57% of the executives of 30 leading Ukrainian banks who responded in a poll carried out by a team of experts with the PRI Group (previously known as Prime Time), who specialize in communications technologies. 43% of the responders proved more cautious, stating that the future of the Ukrainian banking sector would depend on who would be the next head of the National Bank of Ukraine.

Bankers generally prefer to keep their distance from politics; they refuse to associate their business with the controversial political situation even hypothetically, for this could mean additional unwelcome risks. 27%of the respondents made it clear that further development of the banking sector would depend not on the next head of state, but on the next head of the NBU. One could agree with this belief if the NBU remained apolitical not only de jure, but also de facto. Unfortunately, this is not so. As it was, more than half of the respondents thought the NBU was doing fine; 55% stated NBU was helping to develop the banking sector while 22% believed it was instrumental in upholding fiscal discipline.

Concerns about the hryvnia's stability proved valid. In fact, 33% of the respondents believe that the Ukrainian national currency will remain stable up to the presidential election date while the same percentage feels sure that the inflation process will cause the hryvnia to plummet after the campaign. Only 17% believe that the hryvnia will remain stable, no matter what. Such doubts are no to manifest, but there is no denying their presence. PRT experts mostly attribute them to the anticipated sharp budget expenditure increase in Ukraine. In September, the cabinet increased social payments declaring that this would be implemented quickly. However as usual, the Cabinet of Ministers of Ukraine did not bother to comment on the source to finance these increases. This information gap, naturally, causes the market to respond accordingly - an elementary market economy rule the Ukrainian government seems ever loath to learn. This follows on from the strategic errors made regarding the grain and metallurgy crises in 2003, and the petrol and meat supply ones in 2004. What's next?

With regard to Ukraine's banking prospects, our next question was: What trends will prevail, if and when foreign banks access the Ukrainian market?

29% of the respondents said that this would cause the loan and deposit rates to be revised; another29% believed that this would trigger off a merger of Ukrainian banks; 21% stated that this would cause Ukrainian banks to be swallowed up by foreign banks; 22% believed that this would encourage Ukrainian banks to show a more flexible and aggressive attitude. Practically half the respondents said that they would study the possibility of accessing foreign loan markets in the next year or two. In other words, some of the Ukrainian banks are getting actively prepared to master new territories, while others are already bracing themselves for the influx of foreign rivals. In this sense, the role of communications and PR technologies will become even more important; things kept secret today will have to be made public knowledge tomorrow.

Domestic bankers proved divided on the role and place of modern communications. The respondents estimated the existing local-central (NBU) bank links as high (38%) and on average (63%). Inter-bank communications were described as being in need of upgrading by 32%, and as inadequate by 23%.

When asked about the mass media, only 13% said their performance was adequate; 50% stated that everything depended on a given media affiliation - meaning that whoever paid could order the tune - and 25% felt sure that the media did not always provide truthful information. In addition, 50% of respondents said they were largely doing nothing to improve the situation, although being fully aware of its importance. Some 51% stated that their banks were struggling to solve problems relating to communications technologies, relying on their own resources; 17% said that such issues were their top managers' jurisdiction.

An analysis of these polls clearly points to a trend, showing that most Ukrainian banks become aware of the need to be a subject, rather than object, to the information space whenever they determine to move forth rather that preserve the existing positions. Even though many banks prefer to keep their transactions secret, considering this standard procedure, they form a minority. The first to understand this will be the first to win.

The Ukrainian 5/2004