State-owned banks in the global financial system

Анотація

This article examines the characteristics of various models of public sector banking that have emerged in countries and regions around the world. Public sector banks remain a vital component of the global financial system, owing to their unique role in the economy as an instrument for advancing public interests. The following features are examined: the German model as a classic example of successful state banking with a focus on regional development; the Chinese model as an example of a large-scale state banking sector aimed at supporting rapid economic growth; and the Indian model, where banks successfully demonstrate a steady trend towards reducing non-performing loans (NPLs).

 A comparison of key financial indicators of state-owned and private banks reveals the advantages and limitations of the state banking sector under different economic conditions. It has been established that the state’s share varies significantly across different regions of the world, ranging from 15–24% in developing countries to over 50% in China and India.  Over the past decades, the share of state-owned banks worldwide has been gradually decreasing. In Ukraine, state-owned banks account for over half of the banking sector’s assets as of early 2026, which is an unusually high figure for a market economy. The key financial indicators of Ukraine’s state-owned banks have been analysed. It is concluded that, during a period of martial law, a high level of state participation ensures stability during macroeconomic instability, enables the financing of the defence-industrial complex, facilitates the implementation of business support programmes, and builds financial capacity for the country’s post-war reconstruction. The strategic direction for the further reform of the domestic banking sector is the gradual reduction of state presence through privatisation, which is in line with Ukraine’s commitments to the IMF under the ‘ ’ programme and the recommendations of the EBRD, whilst the key areas of reform should be improving the efficiency, transparency and accountability of the banking system.