PRESS RELEASE: Study shows decline in transparency among Ukrainian banks
Kyiv, Ukraine (October 8, 2010) – Released today, results of an annual Standard & Poor's study show that Ukrainian banks slipped further away from international standards in disclosure and transparency. The USAID Capital Markets Project provided technical and financial assistance to the research but did not take part in the methodology. "Information disclosure is key to building trust among investors – whether they are large corporations or Ukrainian households," said Robert Bond, Chief of Party of the USAID Capital Markets Project. "That's why the USAID project consistently supports initiatives such as Standard & Poor's annual study of transparency and disclosure by Ukrainian banks." The joint research on Transparency and Disclosure by S&P and the Financial Initiatives Agency looks at the performance of Ukraine's 30 largest banks by net asset value. The study is divided into three blocks – transparency on ownership structure and shareholder rights, providing financial and operational information, and supervisory board and management structure and processes. The selected banks make up a major chunk of the country's banking market, representing over 81 percent of corporate loans and almost 87 percent of retail loans. In 2010, the study's transparency index average for Ukraine's 30 largest banks is 42.7 percent, which is 6.1 percentage points lower compared to 2009. Among the 28 banks represented in both the 2009 and 2010 report, only eight showed greater transparency, while 20 banks showed a weaker performance. For instance, only 10 banks out of 30 published their annual reports, continuing a downwards trend that started in 2008. "Banks are definitely falling behind in transparency and disclosure," said Aleksey Kutsenko, a banking expert and one of the commentators of the study results. Since 2005 through October 2010, USAID's Capital Markets Project has assisted its Ukrainian partners in developing a vibrant financial sector. One of the Project's key objectives is to provide assistance to the Securities and Stock Market State Commission in the creation of an effective legal and institutional environment for the stock market operation. The USAID project has supported the Commission in developing and implementing Electronic System of Comprehensive Information Disclosure (ESCRIN), a new electronic system of information disclosure by publicly listed and traded companies. As USAID's Capital Markets Project is drawing to a close in October 2010, USAID's Financial Sector Development Project is taking on part of its mission. For more information about USAID Capital Markets Project and USAID Financial Sector Development Project and their activities, please visit www.capitalmarkets.kiev.ua and www.finrep.kiev.ua. You can also reach the projects' communications team at: +38 (044) 379-13-75. The American people, through the U.S. Agency for International Development (USAID), have provided economic and humanitarian assistance worldwide for nearly 50 years. In Ukraine, USAID's assistance focuses on three areas: Health and Social Transition, Economic Growth and Democracy and Governance. Since 1992, USAID has provided $1.7 billion in technical and humanitarian assistance to Ukraine. For additional information about USAID programs in Ukraine, please call USAID's Development Outreach and Communications Office at: +38 (044) 492-71-01 or visit: http://ukraine.usaid.gov. Contacts: 7/9 Yaroslavskyi Lane, 2nd Floor, 04071, Kyiv, Ukraine tel: +38 044 379-13-75; fax: +38 044 379-13-76 e-mail: office@capitalmarkets.kiev.ua www.capitalmarkets.kiev.ua